Last Friday (October 6, 2023), the US Bureau of Labor Statistics (BLS) released their latest labour market data – Employment Situation Summary – September 2023 – which showed payroll employment rising by 336,000 and the unemployment rate stable, after rising 0.3 points to 3.8 per cent in August. I posed the question last month when employment growth had slowed considerably and unemployment had started to rise whether this marked a tipping point. My answer, given the extra data that resolved some of the uncertainty about last month’s data, is that I don’t think it did. In September 2023, the data suggested a very steady labour market – employment growth above the average of the last 9 months but just enough to keep pace with the labour force growth. Participation was constant as was the employent-population ratio. All signs of stability. The disturbing fact though, was the renewed failure of nominal wages growth to transalate into real wage gains for workers. The relatively modest real wage gains over the last few months as the inflation rate has declined evaporated. The question that mainstream economists need to answer is how come the significant interest rate rises have not seriously impacted the labour market performance? I know why. But their textbooks do not!