Australia’s deteriorating economic conditions are hurting households across all areas and metrics, and there is no obvious end in sight.

That is the downbeat message from a comprehensive new investigation into the financial wellbeing of Australian households, by ME (formerly ME Bank).

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The ME Household Financial Comfort Report found a deterioration in all 11 key areas since December 2014, including job prospects, income, wealth and confidence.

Overall household comfort fell by 6 per cent.

One of the most striking falls was in households’ confidence in dealing with a financial emergency, which reduced by 11 per cent since December.

Confidence in cash savings and investments both fell by 9 per cent. Fewer households reported an increase in income from December 2014, while more reported a drop.

Households recorded the most comfort in meeting immediate living expenses, though this metric also fell sharply.

The generations to records the sharpest fall in comfort overall were Gen Y and pre-retirees, though baby-boomers as a whole remain the most comfortable generation.

Perhaps of most significance to the economy was the sentiment around jobs.

Self-employed people reported the biggest fall in comfort, plummeting 21 per cent. Full-time employees, meanwhile, recorded a 7 per cent drop.

Fewer than half of full-time employees said it would be easy to find a new job if they lost their current one – a fall of 9 per cent.

Housing data shows mixed results for the nation.

Backed up by CHOICE

ME’s findings are emphatically backed up by a new report by CHOICE.

The CHOICE Consumer Pulse report, which measures sentiment over household expenses, found consumer anxiety has increased in every category over the three months to June 2015.

The biggest cause of anxiety was the cost of energy, with food and fuel not far behind.

Half of Australians are worried about interest rates, while 66 per cent are concerned about their savings, and 48 per cent about their debts.

Fifty per cent were worried about their superannuation balance, and 65 per cent are worried about spending cuts.

And one in three Australians says the economy is in a ‘poor’ state, compared with just 22 per cent who say it is good.

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Are consumers right to be so downbeat?

ME’s consulting economist Jeff Oughton told The New Daily that consumer’s are pretty much on the money.

“The economy is still in third gear, below potential, and you’ve got the governor of the Reserve Bank saying economic growth might now be lower than what it used to be.

“Nominal income growth in Australia is very sluggish now because of the fall in commodity prices. And that’s what’s falling through into these very subdued household income growth.

“And people are rightly being cautious. Because if commodity prices keep on falling and China keeps on slowing, the best days of income gains are behind you.”

Regarding commodity prices, Mr Oughton said there is not much the Australian government can do: we’re at the world’s mercy on that one.

“This period of sluggish growth and weak labour market is likely to persist until the world gets going and commodity prices start to lift.

“I can’t emphasis this enough: Australia is a great place, but it’s only 1-1.5 per cent of the world.”

That said, there are things that could be done to give the economy a kickstart: in particular, by increasing government expenditure on infrastructure.

“We’ve got ourselves into a bit of a bind here at government levels. The governments know they could do with some infrastructure spending. There’s a long list of things that need to be done, but they’re arguing about who’s going to do it, and how it’s going to be funded.”

And the more governments vacillate, the more households struggle.