Today’s story adds to yesterday’s story where I revealed why economics is called “the dismal science.” It’s also often seen as a “zero sum game” where someone or a group wins but another loses.

And I know normal people think economists are as ‘mental as anything’, and I agree, and so when I read that Australia Post was sacking 400 workers, I was able to see the communal plus in the negative news for those poor 400 souls who have lost their jobs.

Why? Well, the Reserve Bank has raised interest rates 10 times and could do it again next Tuesday, but today’s story on top of others that talk about job losses could stop the central bank from raising again.

And by the way, the RBA wants job losses to beat down inflation but that’s a story that is kept under wraps.

So, the postal workers, who will be unemployed, are unhappy next week but interest rate worriers should be happy that they’re not being hit with another rise.

And if that means the RBA does not raise rates again and this leads to an economic slowdown rather than a recession, then there will be less workers like the sacked postal employees in the future. Better still, these soon-to-be unemployed workers might find another job quicker in the future, because they lost their job and it made the RBA stop raising interest rates.

This dismal science is a zero-sum game but it can produce better than you think outcomes. For example, if the RBA’s interest rate torture gets inflation down without a recession, then the number of unemployed will be less than it might be because the lower inflation will permit a quicker cut in interest rates!

Gee, there’s a lot of pressure on Dr Phil Lowe to get this right and by the way, in case you are wondering, the economists and the money market think there is a low chance of an interest rate rise next week.

On the subject of the Aussie rock group Mental As Anything, for some reason as I looked at the rising tally of people being sacked, I thought of that great song “The nips are getting bigger.”

Not being a spirits-man, I wondered what nips actually meant and worked out that they were probably nips of whiskey, which the dictionary refers to. And what was coincidentally interesting was that the dictionary referred to an example of usage, which was "I'm just nipping down to the Post Office."

Well, if you do that, you might not notice anything different because the jobs being lost are linked to the modern unpopularity of letters. Today’s news.com.au story about 400 jobs to be axed says “no frontline roles would be impacted.”

However, these job losses, which really aren’t interest rate related, but are more structurally created by a modern email world, will still add to the rising unemployment levels the RBA wants to see. And the Big Bank is bound to see it more in coming months, which should see the headlines asking when will Dr Phil start thinking about rate cuts?

The CBA economics team thinks we will see them in December, which means these economists think rising jobless rates will be the reason for the central bank to change direction. Australia Post is self-funded but its letter business has meant losses are building and that’s why jobs will go. However, other businesses are being hit by rising interest rates, which are pushing up costs, killing customer demand and reducing profits or creating losses!

Sarah Sharples, writing for news.com.au pointed to the number of stories showing that jobs are disappearing, such as:

• Culture Amp recently cut 100 jobs.
• Woolworths have cut dozens of jobs.
• Finder chopped 15% of its workforce.
• KPMG will make 200 staff redundant.
• Thoughtworks laid off 100 employees.
• Kinde reportedly reduced their team by 28.5%.
• Xero plans to reduce its headcount by as much as 800.
• And that great local business founded and co-led by Mike Cannon-Brookes — Atlassian — is losing 500 employees from its global business!

The job cut snippets in newspapers and websites are getting bigger and many are not being reported, but they are bound to build in coming months, and Dr Phil has to read the entrails of all the economic data out there and then get his interest rate call right on Tuesday and beyond.

He must factor in the following and then guess how these developing issues will hit the job market and the economy:

• The economy has slowed over the past six months and could be growing at a rate less than 1% by year’s end.
• Immigration is surging and The Australian reported that net-overseas migration would reach 650,000 over the two financial years, 2022-23 and 2023-24. This means more workers as demand for workers is falling.
• The work-from-home trend of employees since the pandemic has meant employers are looking at cheaper OS workers.
• Interest rates are hitting business profits and demand for employees is falling.
• The mortgage cliff will force up home loan repayments for those who have been on low, fixed-rate home loans and this will slow spending and the growth of the economy.
• And the job-killer — AI — is coming!

The above will KO economic growth and jobs but they will also bring down inflation, which is another example of why economics is called a dismal science.