Consumer sentiment in Australia - as measured by Westpac - is at its lowest levels in more than two years.
Radio New Zealand's Sydney correspondent families are more fearful about their financial prospects than at any time since the recession of the early 1990s.
The consumer gloom is borne out by retailers, who report a buyers strike as shoppers choose to save rather than spend.
Big retail chains Harvey Norman and JB Hi Fi have reported declines in sales in recent weeks.
Until now, the one hope has been the relative strength of the labour market, but a labour force report for July issued on Thursday showed unemployment rising for the first time since last October.