Three years ago, the jobs market was roaring, and the only thing the Reserve Bank’s economists really lost sleep over was inflation, the surge in prices leaving Australians angry and their wallets drained.

Unemployment, which was hovering around a record low of 3.5 per cent at the time, was far from the bank’s (and most people’s) worries.

The latest unemployment figure of 4.5 per cent shocked most people who were paying attention.Credit: Dionne Gain

By cranking up interest rates – and leaving them there for a while – the Reserve Bank was able to shrink the country’s inflation problem. Sure, home loan borrowers felt the pinch (which probably started to feel more like a full-body press when interest rates peaked at 4.35 and stayed there for a year), but at least it put a lid on inflation by forcing people to tighten their spending habits.

But now, with inflation comfortably between the bank’s target of 2 and 3 per cent, the Australian economy crawling along at a dismal pace of 1.8 per cent in the year to June and unemployment creeping back up, the picture looks different.

Reserve Bank governor Michele Bullock. The bank’s messaging is expected to pivot back in a much less dovish direction, compared with its stance in August.Credit: Dominic Lorrimer

The Reserve Bank has taken notice and is sailing in the right direction – although, like the effects of its interest rates which take about 12 to 18 months to fully flow through the economy, it has been slow. It’s also possible that, like most people (including me), the bank has its biases.

To be fair to RBA governor Michele Bullock, her predecessor Phil Lowe’s downfall was arguably that he jumped the gun. He said interest rates wouldn’t rise until 2024 (with caveats, of course, but the media isn’t known for its nuance) but was then forced to hike them to slow inflation.

That’s a pitfall Bullock has been very careful to avoid, always telling eager journalists at the bank’s press conferences – often with a knowing smile – that she will “not be........

© The Age