Unemployment data suggests the Reserve Bank of Australia was wrong to keep rates on hold in July

The Reserve Bank was not pencilling in a rise to that level this soon and was expecting the June number to come in at 4.2 per cent.

Last week while releasing its rate decision, the Reserve Bank said, “various indicators suggest that labour market conditions remain tight … and that availability of labour is still a constraint for a range of employers”.

The new game is predicting whether the bank will take the plunge and decrease the interest rate by a larger 50 basis points next month.

Thursday’s numbers were seen as vindication by economists and experts who mark themselves for the accuracy of their forecasts on economic data.

That said, even if their interest rate predictions reflect what the Reserve Bank should have done, their near universal misreading of how the central bank was thinking, is still a blot.

With June’s labour force numbers out, now the merry dance of predicting rate movements and second-guessing the Reserve Bank begins afresh.

This time economists are even more certain (although it’s statistically difficult) that the RBA will lower rates in August, which is the next time they meet on monetary policy.

The new game is predicting whether the bank will take the plunge and decrease the interest rate by a larger 50 basis points next month.

There will be some economists bold enough to go out on that limb, but most are sticking to the near certainly of a 25 basis point cut.

The more critical issue for borrowers and depositors is what is called the terminal rate – where the rate finishes in this lowering cycle.

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There are mixed views around this – some think the Reserve Bank will tap out when the interest rate hits 3.1 per cent – down from the current 3.85 per cent level.

At the other end of the spectrum, there is an increasing number of experts who are predicting that by 2026 the rate will fall to 2.85 per cent.

The one thing on which there is agreement, is that the next movement in rates will be down.

At July’s monetary policy meeting, the Reserve Bank board was split 6-3 in favour of holding.

You would have to imagine that in August it will be unanimous.

That’s great news for the mortgagors – because it will take the monthly pressure off paying interest or allow them to boost their offset accounts and pay down their loan more quickly.

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