No more ABS employment numberwang

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Westpac’s Justin Smirk has released the below brief on the Australian Bureau of Statistics’ (ABS) investigation into its labour market statistics.

In short, most of the revisions to the labour force data were implemented by the ABS in October, and Westpac expects no major surprises in the upcoming employment release for November, due out on Thursday. Westpac is also tipping a 0.1% rise in the headline unemployment rate to 6.3%:

The ABS accepts that by changing the supplementary surveys they introduced volatility (changed historical seasonality) to the survey. The ABS modified the seasonal adjustment process in October to account for these changes and said there would be no further modifications. As such Westpac retains its forecast for the November Labour Force Survey for a 10k rise in employment and a lift in the unemployment rate to 6.3% from 6.2%.

ABS supports Labour Force estimates technical review findings

Acting Australian Statistician, Jonathan Palmer, has accepted all recommendations from the independent technical review into the Labour Force survey, released today.

“The ABS has accepted the review findings and has agreed to all 16 recommendations. Implementing these recommendations will ensure the ABS continues to produce high quality Labour Force estimates,” Mr Palmer said.

The review concluded that changes to the timing of the supplementary surveys were the main contributing factor to recent volatility in the seasonally adjusted estimates. The review therefore recommended modifying the seasonal adjustment process to adjust for the impact of supplementary surveys.

The ABS implemented this key recommendation in the October 2014 Labour Force estimates, released on 6 November 2014, and will continue to apply this method to future estimates.

There will not be any further refinements to the methodology applied to the Labour Force estimates until the annual seasonal reanalysis is undertaken in early 2015.

“The remaining recommendations will be implemented over the coming months in consultation with key clients.

“Stakeholder consultation has been an integral part of the review process and I would like to specifically acknowledge the contributions from the Treasury and the Reserve Bank of Australia.” Mr Palmer said.

The review’s executive summary and ABS response are available on the ABS website www.abs.gov.au. The full report from the technical review is available on request.

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.