A new analysis suggests Australians are scouring the internet for stories to justify their unhappy state of mind.
Australians love to think of themselves as outgoing and optimistic, yet a new analysis suggests we are more inclined to search for stories related to an economic “downturn” than an “upturn”.
And we are not alone.
Commonwealth Bank chief economist Michael Blythe says a simple Google Trends analysis of searches found such outcomes are especially common in North America, Europe and New Zealand, as well as Australia.
It ties in with consumer sentiment surveys showing there are more pessimists than optimists in Australia.
“People are more inclined to believe the bad news and discount the good news,” Blythe told AAP.
Searches related to “recession” show six major peaks during the past five years and generally related with runs of weak economic data or data that falls short of expectations.
Spikes in recession fears can reflect anything that is seen as a threat to fragile finances or a more intense focus on geopolitical developments.
“The disposition to look for the worst is one of the enduring legacies of the global financial crisis,” Blythe says.
So what are the odds of a recession in Australia?
The economy is in its 26th year of uninterrupted economic expansion, the longest of any major economy in the modern era.
Blythe describes this expansion as “mature” and a downturn “overdue”.
Yet he points to a recent Fairfax survey of economists and academics predicting only a one-in-five chance of a recession.
In other words, there’s an 80 per cent chance of dodging a recession bullet.
Still, consumer confidence surveys released this week reflect the notion we’re not happy with our lot.
The Westpac-Melbourne Institute sentiment survey, for example, posted an eighth consecutive month where its confidence index has been below 100, indicating pessimists continue to outnumber optimists.
In contrast, the National Australia Bank business survey showed conditions at their highest level in almost a decade and prior to the world economy heading into the depths of the global financial crisis.
Blythe says if businesses deliver on jobs, it will ease the “deadweight” of job security fears.
“A job’s a job, but if it is a part-time job rather than a full-time job the dollar spending power is going to be less,” Blythe says.
Wages growth is key to the outlook.
As of March, wages were growing at a record low 1.9 per cent and below the rate of inflation at 2.1 per cent, meaning people’s standards of living are going backwards.
Furthermore, the consumer price index is a broad basket of goods and services and broken down into individual price changes on essential goods and services and you can see why people may be a bit grumpy.
Electricity costs were up 7.5 per cent over the year to March, secondary school education 4.1 per cent, insurance 6.8 per cent and medical and hospital services 5.4 per cent.
Reserve Bank governor Philip Lowe told a conference in June at some point workers will be prepared to ask for large wage rises as the labour market tightens.
He saw that as a “good thing”.
And if successful, It may even encourage us to look for more positive things on the internet.