Misery index shows worse picture for Aus

Last updated 10:33 19/08/2014
misery index

NOT HAPPY: New Zealanders are more economically chirpy than their pals across the Tasman.

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The rugby was a draw but Australia has us beat when it comes to economic misery, with its "misery index" at a six-year high.

The index, invented by American economist Arthur Okun, adds the unemployment rate to the inflation rate as a basic way of measuring economic unhappiness.

Australia's index is at 9 points, consisting of an unemployment rate of 6 per cent and annual inflation of 3 per cent.

This is the highest the Australian index has been since 2008, when the collapse of Lehman Brothers Holdings froze credit markets around the world and triggered the deepest recession in the US since the Great Depression.

New Zealand's index is 20 per cent lower at 7.2, with both our inflation rate (1.6 per cent) and our unemployment rate (5.6 per cent) lower than across the Tasman.

NZIER principal economist Shamubeel Eaqub said the latest misery index was a good result for New Zealand.

"New Zealand is doing better," Eaqub said.

"It's heading in the right direction compared to Australia."

Our index is down from 7.4 points in the March quarter and 7.6 points in the June quarter, thanks to a drop in unemployment to a five-year low.

The trans-Tasman misery gap has reversed in the past two years since June 2012 when Australia's score was only 6.3 compared to New Zealand's 7.8.

New Zealand's lowest misery score was 5.4 in June 2007, but by September 2008 the index had jumped to 9.3.

Our current misery score is less than half of what it was in June 1990, when the index was at 15.3 points.

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