Employment Financial security

January 2014 LFS: An alternative view. The ‘self-employment’ report

Chart 1 Self-employment
Chart 1 Self-employment

Source: CANSIM Table 282-0089 Labour force survey estimates (LFS), employment by class of
worker and sex, seasonally adjusted and unadjusted, monthly (persons x 1,000), Statistics Canada

The start of a ‘self-employment’ run?

The story for the last three months’ Labour Force Survey (LFS) reports has been self-employment. 28,300 of 29.400 jobs supposedly created in January 2014 were self-employment. 37,900  of 45,900 jobs supposedly lost in December 2013 were self-employment.
19,100 of 21,600 thousand jobs supposedly created in November 2013 were self-employment.

StatsCan played it down in the analysis, knowing such spikes/drops in self-employment don’t signal real job creation. As a reference point, the last extended self-employment streak (where self > regular, payroll emp) was six months straight, November 2008 to April 2009 – the heart of the Great Recession. To highlight the fact that those weren’t real jobs, all the self-employment  ‘gains’ from late 2008 thru 2009 were wiped out in 2010.


Lately, it’s been less the ‘jobs report’ and more the ‘struggling-to-find-a-job-and-settling-for-makeshift-work report’, with an added touch of uncertainty about all the figures reported (monthly changes relative to standard errors). Hopefully some keen-eyed business journos are on it this morning.

Contrasting the self-employment record over the last 5 years (recessionary job losses began Q3, appeared in LFS Q4 2008) to the preceding 5 years, Chart 1 shows monthly gains and losses aggregated for each referenced year (latest revised data). Aggregate monthly self-employment gains 2004-2008 were 584.0 thousand, with 373.7 thousand losses, for a net gain of 210.3 thousand over the 5-year period. On the other end, aggregate monthly self-employment gains 2009-2013 were 511.6 thousand, with 486.2 thousand losses, for a net gain of just 25.4 thousand over the 5-year period.

Even in the best of times, self-employment isn’t much in the overall labour picture. Bottom line: the 5 years since the Great Recession collectively netted a 25.4 thousand gain in self-employment. When markets react strongly to a labour report that shows effectively nothing, you know traders were just itching for an excuse to start a rally.


Today’s LFS write-up by Tavia Grant in The Globe and Mail does it right. Starts by mentioning self-employment, gives an anecdote to demonstrate what it means to the average worker, and closes with reference to the gaping target presented by the survey’s recent volatility (due to relatively small monthly changes). For readers who can’t access the page: The standard error is 28,900, meaning there is a two-thirds likelihood last month’s employment gains ranged between 500 and 58,300.
(Not to state the obvious, but that also means a pretty good – one-third – chance it was even further off, possibly even a loss.)

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