Tag: employment data

Unemployment Rate Steady – ABS

The latest data from the ABS was released today, providing an updated view of unemployment.  The underlying trends remain, despite the fact that the seasonality of the labour force data has been re-estimated with specific adjustments made for the changed pattern of supplementary surveys. These adjustments have been applied to the seasonally adjusted series from December 2013 onwards.

Based on trend estimates:

  • Employment increased to 11,589,000 from a revised September 2014 estimate.
  • Unemployment increased to 768,700.
  • Unemployment rate remained steady at 6.2% from a revised September 2014 estimate.
  • Participation rate remained steady at 64.6%.
  • Aggregate monthly hours worked increased 0.4 million hours to 1,607.9 million hours.

Seasonally Adjusted:

  • Employment increased 24,100 to 11,592,200 from a revised September 2014 estimate. Full-time employment increased 33,400 to 8,058,500 and part-time employment decreased 9,400 to 3,533,700.
  • Unemployment increased 7,100 to 772,100. The number of unemployed persons looking for full-time work decreased 10,900 to 532,100 and the number of unemployed persons only looking for part-time work increased 18,100 to 240,000.
  • Unemployment rate remained at 6.2% from a revised September 2014 estimate.

Unemployment-Rate-Oct-2014

  • Participation rate increased 0.1 pts to 64.6%.

Participation-Rate-Oct-2014

  • Aggregate monthly hours worked increased 24.9 million hours (1.6%) to 1 ,614.4 million hours.

ABS Adjust Labour Force Stats Again

The ABS have now reworked the seasonally adjusted numbers, which effectively lifts the unemployment rate slightly.

In the time since the September 2014 labour force estimates were released, the ABS has systematically assessed the effects of each supplementary survey on the labour force estimates. Significant effects have been found for some supplementary surveys, with little or no measurable impact caused by others. As a result of this analysis, an approach has been developed to re-estimate the seasonality of the labour force data with specific adjustments made for the changed pattern of supplementary surveys. This approach will be adopted for the October 2014 labour force release and will result in revisions to the previously-estimated seasonally adjusted (and consequently the trend) results.

In practice, the new seasonal methods should be used to revise the seasonally adjusted estimates for every month in the labour force estimates (i.e. from February 1978 to October 2014). However, checking the consistency of every series from 1978 is not possible in the short time available (the seasonal adjustment process is based on adjusting at a detailed level and aggregating the component series to the totals for persons employed and unemployed) even though the impacts will be small for most months.

The most urgent need has been to resolve the problems in the last few months in the time series. Therefore, as an interim measure, the new approach has been used only from December 2013 to October 2014. In practice, the impact of this interim measure on the percentage changes in seasonally adjusted persons employed and unemployed between November and December 2013 is minimal.

The revised methodology will be applied in future months. In addition, work will continue on refining the methodology and verifying the changed seasonal factors for the full length of the monthly series. The ABS expects to revise all the seasonally adjusted data in conjunction with the annual seasonal reanalysis in early 2015.

The Labour Force Survey uses the concurrent seasonal adjustment method to derive seasonal factors. Concurrent seasonal adjustment uses data up to the current month to estimate seasonal factors for the current and all previous months. This process can result in revisions each month to estimates for earlier periods. However, in most instances, the only noticeable revisions will be to the seasonally adjusted estimates for the previous month and one year prior to the current month. Concurrent seasonal adjustment will continue to be used during the next few months. However, as an interim measure, any revisions to seasonally adjusted estimates will be restricted to the period from December 2013 onwards until the annual seasonal reanalysis is completed in early 2015.

Setting the seasonal factors to one for the seasonally adjusted unemployment estimates for July, August and September 2014 published on 9 October resulted in a slight downward bias in the number of persons unemployed and the unemployment rate for those three months. This was not observed in other series and has been rectified by the new seasonal analysis.

UNEMPLOYMENT RATE (TOTAL PERSONS) – SEASONALLY ADJUSTED
Month
Revised to be used in October 2014 publication
Presented in the September 2014 publication
%
%
June 2013
5.7
5.7
July 2013
5.6
5.7
August 2013
5.7
5.8
September 2013
5.7
5.7
October 2013
5.7
5.8
November 2013
5.8
5.8
December 2013
5.9
5.9
January 2014
6.0
6.0
February 2014
5.9
6.0
March 2014
5.8
5.8
April 2014
5.9
5.8
May 2014
5.9
5.9
June 2014
6.1
6.0
July 2014
6.1
6.0
August 2014
6.1
6.0
September 2014
6.2
6.1

 

Unemployment Up – Probably!

The ABS released their much heralded employment data today for September, having warned yesterday about the seasonally adjusted sets.

Australia’s seasonally adjusted unemployment rate increased 0.1 percentage points to 6.1 per cent in September 2014, as announced by the Australian Bureau of Statistics (ABS) today. The seasonally adjusted labour force participation rate decreased 0.2 percentage points to 64.5 per cent in September 2014.

The ABS reported the number of people employed decreased by 29,700 to 11,592,500 in September 2014 (seasonally adjusted). The decrease in employment was driven by decreased part-time employment for both females (down 31,600 persons) and males (down 19,700 persons). In trend terms the number of people employed increased by 5,600 in September 2014.

The ABS monthly seasonally adjusted aggregate hours worked series decreased in September 2014, down 15.0 million hours (0.9%) to 1,591.3 million hours. The seasonally adjusted number of people unemployed increased by 11,000 to 746,600 in September 2014, the ABS reported.

Looking at the original state data, we see the rate higher in VIC, and lower in WA, and rising on both these states. SA has fallen a little.

TrendUnemploymentOrignalSept2014

State participation also varies, with consistently higher rates in WA, and lower in SA and NSW. Some of this reflects the demographic differences between the states as we discussed recently.

TrendParticipationOrignalSept2014We expect unemployment to continue to trend higher in coming months.

Seasonally Adjusted Employment Data Not Reliable – ABS

Today the ABS confirmed what we already knew, there was something weird about the employment data. When the last set came out, showing major and surprising movements, we highlighted the figures were probably not reliable. See the chart below.

UmeploymentAugust2014Now the ABS has said

The ABS has concluded that the seasonal pattern previously evident for the July, August and September labour force estimates is not apparent in 2014. This assessment was made while preparing labour force estimates for September 2014 and relates to all seasonally adjusted labour force estimates other than the aggregate monthly hours worked series.

As there is little evidence of seasonality in the July, August and September months for 2014, the ABS has decided that for these months the seasonal factors will be set to one (reflecting no seasonality). This means the seasonally adjusted estimates (other than for the aggregate monthly hours worked series) for these months will be the same as the original series and this will result in revisions to the previously published July and August seasonally adjusted estimates.

“It is critical that the ABS produces the best set of estimates that it can,” said acting Australian Statistician Jonathan Palmer “so that discussion is on what the estimates mean, and not the estimates themselves.

“To assist in this, the ABS will commission a review with independent external input to develop an appropriate method for seasonally adjusting October 2014 and following months’ estimates.

“The report on the results of this review will be presented in due course.”

The ABS has not made this decision lightly and believes this approach will result in a more meaningful set of seasonally adjusted estimates.

The ABS will continue to produce trend estimates and, as always, encourages users to use the trend estimates to help understand underlying movements in the labour force series.

This admission will increase the level of uncertainty about the accuracy of the data, at a time when unemployment and underemployment are set to remain high (as the IMF stated today). This is exacerbated by the recent cuts to the ABS budgets, making the sample smaller, and less reliable. We are flying somewhat blind at a time when good reliable data is essential if we are to chart a path through current uncertainties. Or maybe the inconvenient truth about rising unemployment will be muted as a result, and this was not entirely without intent.

Unemployment Better Thanks To Method Change?

The ABS published their August 2014 data today, and on the surface the data appears to rebound from last months seasonally adjusted 6.4% to 6.1%, whilst the seasonally adjusted participation rate rose from 64.9 to 65.2

However, we need to be careful because the ABS introduced a new questionnaire in July 2014, so we cannot be sure how much of the change is due to a data shift. You can read all about the changes here. According to the ABS, the number of unemployed persons decreased by 33,500 to 755,100 in August 2014 following an increase of 41,800 in July 2014 (seasonally adjusted). In trend terms the number of unemployed persons in August 2014 increased by 8,000 to 764,100 and the unemployment rate was 6.2%. Because of the unusually strong increase in employment estimates, the ABS has extensively checked the data.

UmeploymentAugust2014The seasonally adjusted number of employed persons increased by 121,000 in August 2014 to 11,703,500 persons following a decrease of 4,100 persons in July 2014. The increase in August was driven by part-time employment. The employment to population ratio, which expresses the number of employed persons as a percentage of the civilian population aged 15 years and over, increased 0.6 percentage points to 61.3% (seasonally adjusted).

Unemployment amongst those aged 15-24 remains close to 15%

UmeploymentYouthAugust2014At a state level, the largest absolute decreases in seasonally adjusted unemployment were in South Australia (down 10,900 persons), New South Wales (down 5,400 persons) and Victoria (down 3,400 persons). The largest absolute increases in seasonally adjusted employment were in New South Wales (up 45,300 persons), Queensland (up 26,500 persons) and Victoria (up 26,100 persons). Tasmania had the largest increase in the seasonally adjusted participation rate (up 0.7 percentage points), followed by New South Wales (up 0.6 percentage points) and Queensland (up 0.5 percentage points). Seasonally adjusted estimates are not published for the territories.

StateUmeploymentAugust2014Looking at the latest month, males in Tasmania are most likely to be out of work. Females in NT, least likely.

StateUnmeploymentGenderAugust2014Finally, looking at underemployment by age ranges, younger people are seriously underutilised, and we see underutilisation in the over 55’s rising. The labour force underutilisation rate increased to 14.3% whilst seasonally adjusted estimated labour force undertuilisation rate increased 1.0 pts to 14.6%. The male labour force underutilisation rate increased 1.0 pts to 12.7%. The female labour force underutilisation rate increased 1.0 pts to 16.9%.

UnderutilisationRatesJuly2014

We will see if the data next month continues to reflect the revisions this time around.

Australia’s Unemployment Rate Increased to 6.4 per cent in July 2014 – ABS

According to the ABS, in data released today, Australia’s seasonally adjusted unemployment rate increased by 0.3 percentage points to 6.4 per cent in July 2014. We also note that female and male unemployment rates have converged.

UmeploymentJuly2014The seasonally adjusted labour force participation rate increased by 0.1 percentage points to 64.8 per cent in July 2014. The number of people employed decreased by 300 to 11,576,600 in July 2014 (seasonally adjusted). The decrease in employment was due to decreased part-time employment, down 14,800 people to 3,499,200. This was offset by increased full-time employment, up 14,500 people to 8,077,400. The monthly seasonally adjusted aggregate hours worked series decreased in July 2014, down 14.8 million hours (0.9%) to 1,610.7 million hours. The seasonally adjusted number of people unemployed increased by 43,700 to 789,000 in July 2014.

Looking at the state data, the average unadjusted rate  unemployment rate increased 0.1 pts to 6.1%, based on unrounded estimates. ACT still has the lowest rate, whilst TAS has the highest.

StateUnemploymentJuly2014Whilst there are some statistical reasons for the result (changes in the sample this time), the fall in aggregate hours worked indicates this is a concerning result. As such, we expect unemployment to be a drag on momentum, and it will curb enthusiasm for property amongst some segments. In our household survey results however, the largest changes in unemployment were amongst those who were classified as property inactive, closely followed by those who have purchased recently. Given the high loan to income ratios in this group, any unemployment impact may be magnified in this highly leveraged group.