Statistics without context are often misleading, and politicians are always keen to report numbers in a way that highlights their efficacious management. Any sort of good economic data, they are eager to broadcast widely and take credit for. Any sort of bad news, they advertise less vigorously. When positive spin can be put on bad numbers, politicians (and their communications staff) will spin them like a top.

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Matthew Lau: Chrystia Freeland spins the job numbers Back to video

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On Statistics Canada’s release of the August 2023 employment figures, Finance Minister Chrystia Freeland proclaimed, “Good news this morning! The Canadian economy added 40,000 jobs in August. That means there are now 983,000 more Canadians employed compared to before the pandemic.” But her boast was a hollow one. Most of the employment story remains untold by these two numbers, and the economic reality is much worse than they suggest.

To begin with, monthly StatsCan data are typically later revised, sometimes by relatively large amounts. As StatsCan discloses in its table on recent developments, there’s an approximately 32 per cent chance that its estimate of a 40,000-person increase in employment in August is either over- or under-estimated by at least 30,700, and a non-trivial five per cent chance its estimate is off by at least twice that. So when the final numbers come out employment may well have gone down in August instead of up.

Nevertheless, taking 40,000 as the current best guess, that growth is rather less impressive considering the population of Canada increased by an estimated 102,900 and the labour force by 54,200 — even if these estimates are also subject to eventual revision. When the employment increase is compared to the labour force increase, the reported employment rate actually ticked down — from 62.0 per cent in July to 61.9 per cent in August. It’s a fact omitted from the finance minister’s little cock-a-doodle of the government’s employment statistics victory.

In the same way, if you put the “983,000 more Canadians employed compared to before the pandemic” boast into context, this too was the result of population and labour force growth, not an improved economic environment. Every month from September 2018 to February 2020, the reported employment rate was between 62.0 and 62.5 per cent, so the August 2023 employment rate of 61.9 per cent is actually not much to brag about.

To add more context: from February 2020 to August 2023, jobs grew 12.6 per cent in the public sector versus only 3.3 per cent in the private sector (including the self-employed). Thus, of the 983,000 jobs Freeland bragged about, roughly half (or 476,000) were government jobs. The distinction is important. Private-sector workers produce goods and services consumers demand — for the simple reason that businesses that pay workers to produce what customers don’t want won’t survive long. Government workers are employed producing what politicians decide people want, whether they really do or not.

Another important reservation is that reported statistics on private-sector and public-sector employment materially understate labour dedicated to political or government production versus business production. The federal government has given $116.8 million (or more) in contracts to McKinsey since 2015. Those high-priced consultants were recorded as private-sector employees, but the ones working on federal contracts were producing what politicians wanted and not necessarily goods and services Canadians demanded.

A final example of government-directed demand is the approximately $28 billion in subsidies for electric-vehicle battery plants announced this year. The workers at these plants will be counted as private-sector workers but they will be producing goods decided by government, not consumers.

Putting it all together, it’s misleading to claim that recent employment statistics reflect a thriving economy producing goods and services that Canadians want and that improve their living standards — despite how politicians may try to spin the numbers.

Matthew Lau, a Toronto writer, is an adjunct scholar with the Fraser Institute.