TD Bank economists unveiled a new labour market indicator today, which they say suggests that Canada’s jobs picture is gloomier than traditional employment reports indicate.

TD Economics has created a new Canadian Labour Market Indicator (LMI) that incorporates job market measures developed by both the Bank of Canada and U.S. Federal Reserve, in a bid to get a clearer look at the job market than straightforward jobs data. And, it reports that this new indicator shows “that the Canadian labour market is currently experiencing more weakness than is implied by looking at the headline unemployment rate alone, and has been for nearly two years.”

TD’s new metric sues 14 labour market variables and incorporates them into a single indicator, which is then scaled to be comparable to the unemployment rate. Eight of the variables are used by the Bank of Canada in its labour market index, but it also adds several other variables, following a new index on U.S. labour market conditions that was developed by the Fed.

It reports that over time, the TD LMI has closely tracked the headline unemployment rate, but it tends to be less volatile. However, beginning in early 2013, the TD LMI began to diverge from the unemployment rate, it reports.

“Specifically, the TD LMI has been gradually trending up to 7.2% in September 2014 while the official unemployment rate has edged down, reaching a low of 6.8% in the same month. The TD LMI therefore suggests that labour market conditions worsened slightly over the past two years, while the unemployment rate has suggested that they had improved,” it says. “The resulting spread between these two measures is currently the widest it has been since the 2008-2009 recession.”

TD says that the suggestion that the Canadian labour market is underperforming relative to the official unemployment rate “supports the Bank of Canada’s view that significant slack in the Canadian labour market persists, and adds further weight to its continued accommodative policy stance.”