The Australian Bureau of Statistics has made a significant change to its monthly statement on employment data following more than a year of mounting concern about the reliability of the jobs numbers.
Market analysts have become increasingly vocal in their criticism of the wildly volatile headline number that the bureau publishes on the second Thursday of each month. A former head of the ABS recently said the results weren’t “worth the paper they’re written on”.
For example, May’s employment data showed that almost 47% of new jobs created were female full time employment growth in Western Australia, a number which simply didn’t make sense.
The seasonally adjusted figure is usually the first point in the monthly ABS statement. But today in what appears to be an admission that the seasonally adjusted number – which tries to adjust the survey results for factors known to affect findings depending on the time of year – the “trend”, or underlying number, was the first point of reference in the statement:
Trend employment has increased by 260,500 since October 2014, contributing to an increased employment to population ratio over the year from 60.6 per cent to 61.1 per cent. The trend unemployment rate has remained relatively stable over the year, decreasing from 6.2 per cent to 6.1 per cent.
The trend series smooth the more volatile seasonally adjusted estimates.
The previous month’s statement was all about the seasonally adjusted findings, with the final paragraph referring to the trend data.
This is unlikely to quell concerns about the reliability of the employment data, which is one of the most crucial indicators of the health of the economy and has significant effects on currency and equity markets.
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