Looking at the May unemployment numbers (which were an absolute ripper!) made me think about the old joke about the guy who’d lost his leg in an operation that didn’t do as well as the doctors had thought.

After the op, the surgeon explained that there was good news and bad news. The patient asked for the bad news first, which was “you’ve lost a leg!” The patient then said: “What’s the good news, doc?” To that the reply was: “The guy in the next bed wants to buy your slippers.”

These employment and jobless numbers are great news for Treasurer Josh Frydenberg, the shrinking of the Coronavirus-created huge budget deficit, anyone out of work and business owners who need great economic growth to make up for the financial problems from 2020.

But it’s not great for Reserve Bank boss Dr Phil Lowe, who should be really happy that the economy he’s paid to influence is doing better than he predicted. Now ordinarily this would be a feather in an RBA Governor’s hat, but Dr Phil has promised that interest rates wouldn’t rise until 2024. However, if this economic improvement continues, they will rise in 2023 or maybe 2022!

Those doomsday merchants, who stressed us out talking about the fiscal cliff, have been told that their economic guesswork is below par and that the optimists were more on the money. And these job stats from AMP Capital’s Shane Oliver prove it:

1. Employment rose by 115,200 in May. It’s now up 8.1% from its May low last year, partly reflecting the base effect of the plunge in jobs seen a year ago.
2. Employment is now up 1% from its pre-coronavirus level in February last year. 
3. The compositional mix was also strong, with full time jobs up by another 97,500.
4. Unemployment fell to its pre-coronavirus level of 5.1% from 5.5%, despite a rise in the labour force participation rate to 66.2%, which is also above its pre-coronavirus level.
5. Underemployment also fell by -0.4% to 7.4%, which saw the labour underutilisation rate fall to 12.5%, with both rates now well below pre-coronavirus levels - notably for females.
6. Total hours worked rose by 1.4%. They’re up 13% on a year ago.
7. The ratio of employment to population rose to 62.8%, which is a record high.

When you add this to just about every other piece of economic data that I’ve been monitoring and sharing with you, it all screams that a solid economic growth phase lies ahead. And like Jerome Powell, his central bank counterpart in the US, Dr Phil will be forced to raise interest rates earlier that predicted, forecasted and promised.

In November last year I wrote a piece entitled Is the Reserve Bank governor telling ‘sweet little lies’ about interest rates? Then in March I wrote: Is our RBA guv fibbing or is he a Seinfeld fan?

If you’re not a Seinfeld fan, George Costanza (one of the characters in the TV show) once said: “It’s not a lie, if YOU believe it.”

I think Dr Phil believed it when he first said that rates won’t rise until 2024. The economic likelihood of a big comeback of the economy of the current huge proportions was less likely. But over time he should have been easing up on his 2024 rate call.

The AFR today reports that “bank bill futures now imply a cash rate of 0.25 per cent by September 2022, which would equate to a 15 basis point increase in the next 15 months.”

But even more noteworthy was the fact that in a speech on Thursday Dr Phil changed his wording from “unlikely until 2024 at the earliest”, to telling us that rate rises were “still some way off”.

I feel for Dr Phil, who in the fullness of time, will be congratulated (along with Josh) for an economic job well done. In many ways he had to tell us “sweet little lies” on rates to get us to go full on into consuming, buying, investing and hiring to make up for the economic devastation imposed on us from the pandemic lockdowns.

On that subject, the only way Dr Phil’s 2024 rate call could be on the money, would be if our vaccination programme goes from slow to hopelessly slow. The latest problem with AstraZeneca, which means it’s only for over 60s, means we have to wait for more Pfizer or other vaccines, which will delay our international borders reopening. That will hurt our economic rebound. I don’t want to rain on this great jobs parade but ScoMo and Health Minister Greg Hunt have a crucial medical/economic job ahead to get us vaccinated ASAP. If they fail, Dr Phil might end up being right!