When the jobless just won't participate
The real story behind the latest labour figures...

Latest employment report shows more people are just giving up on looking for work
A deeper look at last Friday’s employment statistics shows more soft spots.

While the official jobless rate is now 7.6 per cent, and this is of course a government figure, the broader rate, which includes discouraged workers, the unemployed and involuntary part-timers (called the R8 series), was 10.2 per cent in November. That's not much improved from the 11 per cent rate a year ago.

Meantime, the unexpected drop in the country’s national jobless rate last month, to 7.6 per cent from 7.9 per cent, sounds good on the surface because it hasn’t been that low in almost two years.

The reason, however, stems more from a tumble in the number of people looking for work than from any real job growth. Full-time jobs disappeared last month while private-sector positions also evaporated.

About 43,600 fewer people searched for a job last month. It’s little wonder some are giving up, taking a breather or going back to school: Canada hasn’t created many jobs in the past five months, after a strong start to the year.

That sent the participation rate, or the number of people who are working or actively looking for work, to 66.9 per cent from 67.2 per cent -- the biggest one-month drop in 15 years, according to Statistics Canada. The current participation rate is the lowest in nearly five years and compares with a high of 68 per cent in March, 2008.

A drop among youth was the main reason for the decline -- youth participation rate is now the lowest in more than a decade. But it’s not only youth who are falling out of the labour market -- the rate fell among adult men and women, too.

“It’s not good news to see less people in the job market," says Benoit Durocher, senior economist at Desjardins Securities in Montreal.

I will be watching the rate closely next month to get a sense whether it’s a longer-term trend, and whether it’s still concentrated mainly among youth. Another low participation rate could signal slower consumption, he says, because it suggests more people are feeling an earnings loss.

This may cause a government tax shortfall ..soon
The effect on the buying of youth goods is also affected .. no money no goods?