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Misery index (NZ/AU)

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A "misery index" is based on the sum of the inflation rate (CPI) and the unemployment rate. It is a measure that has been around for decades, originally made popular by US President Jimmy Carter.

From a New Zealand perspective, the key value is in the comparative with Australia - unless New Zealand has a lower Misery Index than Australia, and by a significant margin, workers will increasingly relocate from here to Australia. The income differential may be one important component driving trans-Tasman migration, but the Misery Index will be another.

Note that the October 2010 GST increase of 2.5% had a direct impact on prices in New Zealand. Not all CPI components had a GST impact, and Statistics NZ advise that prices rose 2.1% as a result of that change. Incomes rose commensurately at the same time through income tax reductions. The data in this chart adjusts for this GST change because there is no other way to represent the offsetting income-tax cuts. What you see in this chart is the 'real' change in Q4 2010 to Q3 2011.