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Job numbers indicate labour market weakness, bleak prospects ahead

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As usual, the monthly Labour Force Survey numbers headline seems to tell a different story than the underlying numbers. According to the LFS, Canada added 35,000 jobs in January. A statistically significant number of jobs, hurray!

But wait. Those were all part-time jobs. We lost 10,000 full time jobs, and added 47,000 part-time jobs.

Oh, and they were all through self-employment. We lost nearly 6,000 jobs, but 41,000 Canadians entered the labour market through self-employment.

In fact, compared to last January, half of all employment growth was through self-employment, with an increase of over 68,000 self-employed workers. The overwhelming majority of those workers were in the most precarious self-employment category -- unincorporated with no paid help. Between January 2014 and January 2015, there was an increase of 53,500 self-employed workers who were unincorporated with no paid help. (All of this data is not seasonally adjusted).

Another sign of concern is the number of involuntary part-time workers, discouraged workers, and those waiting for jobs that start in a couple of months.

The underemployment rate has fallen by less than the unemployment rate has. This is most clearly shown by calculating the ratio of the two. Using seasonally unadjusted data, and comparing the last 10 Januaries, the ratio of underemployment to unemployment is markedly higher in January 2015.

All of this points to underlying weakness in the Canadian labour market, on top of bleak prospects for the near term. The mayors are meeting in Toronto this week, and asking for stable funding to build much-needed infrastructure. The weakness in the labour market is just one more reason that the federal government should listen very closely to what the mayors are asking for.

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