Last Friday (May 5, 2023), the US Bureau of Labor Statistics (BLS) released their latest labour market data – Employment Situation Summary – April 2023 – which revealed continuing employment growth and and modest declines in unemployment. While the US Federal Reserve is deliberately trying to undermine the labour market, even though the inflation rate is falling relatively quickly, the April data suggests that the interest rate increases are not achieving the aim. There is no surprise there. Monetary policy is a relatively ineffective tool to suppress demand. Most of the aggregates are steady and in terms of the pre-pandemic period, March’s net employment change was still relatively strong. Real wages finally showed some improvement in the face of a decelerating inflation rate. Overall, the US labour market is steady and doesn’t appear to be contracting in the face of the Federal Reserve interest rate hikes.