0214 GMT - Australians are generally downbeat, with a range of factors contributing to the pessimism. Top of the list is inflation, says Jonathan Kearns, chief economist at Challenger. One way of conceptualizing bad economic news is the misery index, which adds the inflation rate to the unemployment rate. If the index is changed to combine consumers' recall of news about inflation and unemployment, misery is at record levels, he adds. However, it isn't just inflation that affects households' mood, but the price level itself, Kearns adds. So even if the Reserve Bank of Australia is successful in bringing inflation back to its 2.5% target by early 2028, households might still not be happy, he adds.
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