Today is the beginning of the new financial year, but it seems there is not an awful lot to celebrate.
Despite the minimum wage rising by more than 5 per cent from today, wage growth for the vast majority of workers remains stubbornly low, while the cost of food, energy and petrol continues to rise.
Millions of Australians have gained from record high stock and property prices in recent years, but these are now falling in value because of investments and superannuation.
The Australian stock market is down over 10 per cent from its recent all-time high.
According to Deutsche Bank, safer investments like bonds have had their worst start to the year since the last 1700 s.
Shares fell with Australian shares returning 6.5 per cent and global shares returning around 10 per cent.
A negative return of around 3 to 5 percent of the last financial year is estimated to have been caused by balanced growth superannuation funds. The data from CoreLogic shows the slowest down in the property market in 30 years.
Cryptocurrencies are on the nose too.
The price of the digital currency has fallen to levels not seen since November 2020.
Financial markets are reacting to the rising rate of inflation, which is expected to push interest rates higher, potentially choking off demand in the economy as borrowing and spending fall.
We have revised down our outlook for property prices and now expect a larger peak to fall of around 18, according to NAB chief economist Alan Oster.
On a month-on-month basis, growth for the NAB Online Retail Sales Index contracted again in May - 0.9 per cent following a significantly revised contraction in April -- 1.3 per cent while households struggling with low wage growth struggle with soaring food, energy and petrol prices.
Our latest consumer tracking data for June 25 shows a mixed picture, according to Oster.
A combination of new data and revisions shows hospitality is in a better position than expected earlier this month, while retail looks weaker, perhaps a sign of an ongoing switch from goods to services post-pandemic restrictions.
Other sectors are mixed to weaker, pointing to a consumer sector that is more apprehensive in the face of high inflation, rising official interest rates and increasing economic uncertainty.
The data points to increasing apprehension on non-discretionary goods, as rising rates are yet to hit the consumer. In recent times, the economy has stayed afloat due to the huge demand from China for Australia's natural resources and government pandemic stimulus payments, but the latest data shows that its shoppers are doing most of the heavy lifting.
Is Australia going to enter a recession in the months ahead?
A recession is defined by two consecutive quarters of negative economic growth.
Warren Hogan, former Treasury economist, believes there is a 50 per cent chance of a recession in Australia next year.
He blames higher interest rates, reduced tolerance for larger deficits and slower global growth.
He said that it is the desirable outcome as it will be short lived and followed by a strong recovery.
Inflation will go up in the months to come.
The Reserve Bank governor, along with economists, are forecasting inflation to peak at 7 per cent.
The bottom line remains that until there is evidence that inflation is falling, central banks will continue tightening, keeping the recession risk high, Mr Oliver said.