Australia's consumer prices climbed by 4.3% in the year to September, and a survey of other advanced countries and the eurozone shows none with inflation near Australia's level. Yet on the misery index, the country goes from worst of the lot for inflation to middle-of-the-pack in overall misery. Challenger chief economist Jonathan Kearns set out the contrast a day after the Reserve Bank delivered its fifth interest rate hike for the year.

Why the misery index matters

The misery index adds the rates of unemployment and inflation together to create a very high level view of how households are faring. American economist Arthur Okun thought up the concept in the 1970s.

• •It combines two rates households feel directly: unemployment and inflation
• •It dates from the 1970s and is credited to Arthur Okun
• •It became popular enough to be weaponised during the 1976 presidential campaign

Australia's inflation is clearly worse

Kearns said the gap in inflation is plain. "Our inflation problem is worse than in other countries, that is very clear". The 4.3% rise in consumer prices in the year to September leaves no surveyed advanced economy or eurozone country close to Australia's level.

Prices are anticipated to climb even faster by year's end, a prospect that would lift the country's misery index reading further.

Unemployment pulls the score down

On the index, Australia goes from worst of the lot for inflation to middle-of-the-pack in overall misery. Kearns said the country's performance in unemployment has been much better than in New Zealand, Canada and in Europe, which he called a positive for Australia.