At the lunchtime rush hour, a major Sydney city shopping strip is far from deserted, with plenty of people filling the mall — but not all have shopping bags in their hands.
When ABC News asked people whether they were cutting back or continuing to spend, their answers greatly varied.
"We're on the pension but we're doing OK," an older woman eating her lunch said.
"We're keeping it pretty standard, we always do, that we don't get on the wrong side of the ledger," her partner noted.
Another older man, waiting for his wife to finish her shopping, was in spending mode.
"I'm retired and travelling … sold everything, taking off — at the moment, it's very good."
A young retail worker on a short break was feeling very differently.
"I'm on a pretty tight budget at the moment, just trying to save while living in Sydney," they said.
"Instead of going out to dinner with friends, a lot of staying home and doing things that cost nothing."
A man relying on Centrelink payments was struggling to afford his medical costs.
"I walked across town to get some charity-supplied food and that's pretty much me for the foreseeable future."
Several other people in their 20s and 30s were also trying to bring food to work rather than buy lunch, while others were facing increased housing costs.
One young man saving for a house said rent was his biggest cost, after a 40 per cent price hike.
"We've cut back, that's for sure — we had a Europe trip booked but obviously can't afford that," said another worker whose home loan repayments have jumped.
Economists divided on how resilient households are
Just as Australians are divided in how much financial pressure they're under, economists are split on how well households will weather the cost-of-living storm.
A report from ANZ describes households as "more resilient than you think", and expects spending to pick up next year, even if interest rates don't fall from here.
"The past year has been really tough for the household sector, there's no denying that … but the few years before that were actually quite positive," the bank's head of Australian economics Adam Boyton told The Business.
"That means households, in aggregate, have been able to deal with the inflation and the interest rate rises over the past year."
That, of course, comes with the major caveat, "in aggregate".
Beneath the headline figures, the lived experiences vary.
"If we're saying the household sector is in aggregate in good health, that doesn't mean that every household isn't being impacted and it doesn't mean that there aren't households under serious financial strain," Mr Boyton added.
"What it does mean is, if we step back and ask ourselves, 'where do we think the economy might go over the next 18 months?', it's perhaps not as negative a picture as some people might suggest."
ANZ's measure of real income looks at employee earnings, less interest paid, taxes and adjusted for inflation.
While it has found the past year has been difficult for households, with that measure of income dropping, it follows a positive trend over the previous few years, which it argues leaves real income at "elevated levels".
But other experts think the economic picture is much bleaker.
"I think that we're in for a massive hit to consumers over the next few months and I think that risk to consumers is being underestimated," AMP deputy chief economist Diana Mousina said.
"Another one or two interest rate rises would mean that the average household in Australia will be paying back an extra $16,000-17,000 in mortgage debt a year.
"I don't think that that's sustainable for the economy."
Ms Mousina expects annual economic growth below 1 per cent, which she describes as "very low for Australia".
The Reserve Bank isn't much more optimistic, with its latest forecasts pencilling in 1.2 per cent growth in GDP this calendar year.
While it's currently households with mortgages feeling the direct pain of rate rises, Ms Mousina notes that could quickly spread to the broader economy.
"You'll start to see a turn in business conditions, business confidence, and more broadly the economy will weaken, because that's what happens when interest rates rise and you have tight monetary policy," she argued.
"That's when you start to see overall sentiment for the growth outlook deteriorate across all households, who either have debt or who don't have debt and who are savers.
"They will be impacted as well by increase in the unemployment rate or the broader weakening of the Australian economy, which is what's likely to happen by the end of this year."
Who is feeling the most financial pressure?
While a broader economic downturn could be felt in different ways by most households, the current cost-of-living crisis is being felt by some much more than others.
"If you look across the population, you could sort of say there's a moderate level of pressure, but when you dive into sub-segments within the population, there is definitely winners and losers," Wade Tubman, the head of analytics at CommBank iQ, noted.
CommBank iQ, a joint venture between Commonwealth Bank and data firm Quantium, has used the actual payments data of 7 million Australians to analyse spending behaviour by different demographics.
"We have the ability to really dive into the sub-segments in there and tease out behaviours that, for example, aggregate or macroeconomic measures aren't able to pick up," Mr Tubman argued.
And what it's found are some "major disparities" across the age divide.
"Right now we're seeing the older generations continuing to increase their spending … not just in dollar terms, but actually faster than inflation, so they're increasing their consumption, they're buying more stuff," Mr Tubman observed.
"Younger people are really having to contract their spending and they're contracting it so much so that they're actually not keeping pace with the cost of inflation — that means they're consuming less."
Mr Tubman notes than 25 to 29-year olds are tightening their belts the most, as they are often in the life phase of establishing themselves, and likely to be facing rent increases or have taken on new, and therefore larger than average, mortgages.
"About a third of Australian households have a mortgage, so that group are baring the brunt of what's happened with increase to interest rates," Ms Mousina said.
While she notes the broader impact of interest rates, in terms of corporate loans and the Australian dollar exchange rate, she says it's households with debt facing the largest burden of the hikes at the moment.
"There are some households now that are benefiting from the increases to interest rate, because the savers they can invest in term deposit accounts and they get additional income from that."
The Reserve Bank governor has noted the disparity between households in his statements following interest rate decisions, contrasting the "substantial savings buffers" of some to the "painful squeeze" facing others.
But Philip Lowe argues the pain of prolonged high inflation is a worse outcome — and that's a financial pressure that also hits households unevenly.
"High inflation is considered to be quite negative for lower income groups, because it is almost a like a regressive tax," Ms Mousina said.
"if you have high inflation for things like essential services, or essential items like food, education, health care, utilities, then the lower income households will be spending a larger chunk of their incomes on these essential items.
"Generally speaking, high inflation for a long period of time is unwanted by all different consumers in different income groups, but it does impact the lower income households the most."
