To the eye I might look like a normal person when I’m in the real world, but given my schooling in economics and given my ‘job’ of explaining the economy and what it’s doing and what it has in store for us, I can’t help but process many aspects of my engagement with the community through a filter that interprets what I see in terms of what I expect to see as an economist.

To make this clearer, as an economist, I’d expect that 13 quick interest rate rises should slow down the economy by hitting spending, killing off inflation and setting the scene for rate cuts.

That’s what my training tells me. But recently I was on a long queue to get on a plane in a chock-a-block airport and the ‘real world’ me wondered why 13 interest rates hadn’t reduced the number of flying Aussies, especially when airfares are still crazy and too high!

This filtering of the real world was at odds with what economics told me, so I haven’t been over-surprised to see the slow rise in unemployment and the slow fall in inflation.

A lot of the economic data I monitor says 13 rate rises are working, with the last economic growth number coming in at a meagre 0.2% rise in production for the country in the June quarter, which meant 1% growth for the year. This was the worst annual growth since the recession years of the early 1990s!

Against that, the unemployment number that we saw yesterday hasn’t risen as fast as it has in the past. Despite lots of rate rises, inflation has been slow to fall, though it is showing some improvement, with the latest reading for the 12 months to July at 3.5%. Remember, the RBA wants inflation in the 2-3% band and that would make it easy to cut rates a few times.

So, that’s the conflicting data story with the growth of the economy s-c-r-e-a-m-i-n-g that the RBA should cut, while the inflation and unemployment figures warn the central bank boss Michele Bullock to be careful about cutting too soon.

In case you missed it, the latest jobs report has brought the good news that our economy has created more jobs than was expected — 47,500 instead of the 26,000 predicted. And the jobless rate didn’t rise from the 4.2% level seen in July. That causes a problem for those Australians who are praying for an interest rate cut ASAP.

If the jobless rate rose and less than 26,000 jobs showed up, then we could’ve been more confident that a rate cut this year would be a chance. However, that wasn’t the case. That said, the data drop hasn’t created an open-and-shut case about the strength of the job market and here’s why:

1. All the job gains were part-time.
2. The part-time positions created numbered 50,600, so 3,100 full-time jobs were killed off.
3. The July rise in jobs of 58,200 was revised down by the statistician to 48,900.
4. The ANZ and Indeed survey of job ads fell 2.1% in August. That’s the seventh straight month of declines.

We could be seeing the start of the turning point for the labour market. Soon it could look less healthy, which makes sense considering the poor economic growth reading in the June quarter.

Given the above, it’s hard to imagine that the RBA is likely to cut rates this year but what could change its mind?

Try these potential influences on the RBA’s thinking:

1. October 17 brings the September jobs report. Unemployment needs to rise, and jobs growth has to be unimpressive.
2. The CPI reading on September 25 for the 12 months to August has to be lower than the 3.5%, that we saw in July.
3. The CPI number for the September quarter and the 12 months to September both have to be convincing the RBA that inflation is dropping nicely, That’s Oct 30.
4. If the RBA doesn’t move on rates on Cup Day — the first Tuesday in November — then it will see the October jobs report on November 14.
5. The September National Accounts are released on December 6. If they’re negative, it could worry the RBA.

These are the five dates of data drops that could change Michele Bullock’s mind. Given the US Federal Reserve has given a 0.5% rate cut when 0.25% was expected, our Governor has to wonder whether that bigger-than-expected cut has come because the central bank has underestimated the impact of its 11 rate rises on the US economy.

Rate rises and rate cuts work with a lag. This has meant that in the past central bankers have been caught out raising too late and then for too long.

The clash of what economists have learnt from books and theory sometimes get confounded by something called the real world!