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9 Seasonal adjustment is a means of removing the estimated effects of normal seasonal variation from the series so that the effects of other influences on the series can be more clearly recognised. Seasonal adjustment does not aim to remove the irregular or non-seasonal influences which may be present in any particular month. This means that month-to-month movements of the seasonally adjusted estimates may not be reliable indicators of trend behaviour.
10 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.
11 Seasonal adjustment is able to remove the effect of events which occur at the same time in the survey every year. However, there are some events, like holidays, which are not always at the same time in the survey cycle or which are not at the same time across Australia. The effects of these types of events on Labour Force Survey estimates cannot in all cases be removed, because the pattern of their effects cannot be determined. However, two events which are adjusted for in the seasonally adjusted series are the January interview start date and the timing of Easter.
12 Trend estimates help the user to identify the underlying magnitude and direction of a time series. Seasonal adjustment removes the effect of the last three listed influences from the data, leaving only trend and short-term irregular movements. Trend estimates are then obtained by removing the effects of the short-term irregularities, which in some series can be a major contributor to movements in the original data.
13 Trend estimates are produced by smoothing the seasonally adjusted series using a statistical procedure based on Henderson moving averages. At each time point in a series, a trend estimate is calculated using a centred x-term Henderson moving average of the seasonally adjusted series. The moving averages are centred on the point in time at which the trend is being estimated. The number of terms used to calculate the trend varies across surveys. Generally, ABS monthly surveys use a 13-term moving average and quarterly surveys use a 7-term moving average.
14 Estimates for the most recent time points cannot be calculated using the centred average method as there are insufficient data to do so. Instead, alternative approaches that approximate the smoothing properties of the Henderson moving average are used. This can lead to revision in the trend estimates for the most recent time periods until sufficient data are available to calculate the trend using the centred Henderson moving average. Revisions of trend estimates will also occur with revisions to the original data and re-estimation of seasonal adjustment factors.
15 Seasonal factors are reviewed at least annually for ABS labour series, to take account of additional original data. The results of the latest reviews were used to compile the trend estimates given in this publication. For further information about the most recent reviews of seasonal factors for the labour surveys, see the following publications:
16 The general methods used in the ABS for estimating trends are described in Information Paper: A Guide to Interpreting Time Series - Monitoring Trends (cat. no. 1349.0).
RELIABILITY OF ESTIMATES
17 Estimates in this publication are subject to two types of error:
18 For more information on these sources of error, and on measures of these types of errors, including standard errors, refer to the main publications associated with each of the data series presented in this publication (see the relevant sections later in these Explanatory Notes). More information on standard errors applying to LFS estimates is contained in Information Paper: Labour Force Survey Standard Errors, 2005 (cat. no. 6298.0). To assist users, a spreadsheet incorporating the revised standard error models using composite estimation is available from Labour Force Survey Standard Errors, Data Cube, 2009 (cat. no. 6298.0.55.001).
19 Estimates have been rounded and discrepancies may occur between sums of the component items and totals.
LABOUR FORCE SURVEY DATA
Description of the survey
20 Data in tables 1.1-1.7, 2.1-2.10, 3.1-3.3, and 4.1-4.6 are obtained from the Labour Force Survey (LFS), which provides extensive information about the labour market on a monthly basis. The LFS is a component of the Monthly Population Survey (MPS), which includes the LFS and supplementary surveys.
Monthly Population Survey
21 The MPS is a population survey based on a multi-stage area sample of private dwellings (currently about 23,000 houses, flats, etc.), and list samples of discrete Indigenous communities and non-private dwellings (hospitals, hotels, motels, etc.), and covers about 0.24% of the population of Australia. The information is obtained from occupants of selected dwellings by interviewers, with the first interview conducted face-to-face and subsequent interviews over the telephone. Once selected, households are included for eight consecutive months before being replaced.
Labour Force Survey
22 The LFS has been conducted on a monthly basis since February 1978. Prior to that, from 1964 to 1978, a national survey was conducted quarterly. Telephone interviewing was introduced between August 1996 and February 1997. New questionnaires have been introduced periodically, most recently in April 2001.
23 The LFS includes all usual residents of Australia aged 15 and over except:
24 From July 1993, Jervis Bay Territory has been excluded from the scope of the LFS.
25 The supplementary surveys collect additional data on a different topic each month. Many topics covered are rotated on an annual or less frequent basis, while others are included once only. Results from each supplementary survey topic are released separately. A list of topics covered in recent years is in Appendix 3.
26 The supplementary surveys include a subset of the persons included in the LFS (see paragraph 20). The additional exclusions for most supplementary surveys are:
Multi-Purpose Household Survey
27 The Multi-Purpose Household Survey (MPHS) was introduced in 2004-05. This survey vehicle is designed to provide statistics annually for a number of small, self contained topics, including a number of labour related topics. Data for MPHS topics are collected each month over a financial year. A list of topics covered in recent years is in Appendix 3.
28 In addition to those already excluded from the LFS, the following people are excluded from most MPHS topics:
29 Depending on the topic, there may be further exclusions from scope. For example, some MPHS topics collect information only from a certain population or interest group (e.g. information on retirement and retirement intentions is collected from people aged 45 years or over).
30 Interviews are generally conducted during the two weeks beginning on the Monday between the 6th and 12th of each month, with questions relating to the week prior to the interview (the reference week).
Notes on data
31 From time to time, changes to survey methodology affect the time series produced. Some examples of changes to this survey are: new questions added to the LFS questionnaire in April 2001; and the introduction of telephone interviewing in 1996-97.
32 In February 2004 the definition of unemployed persons was changed to include all persons who were waiting to start work and were available to start in the reference week, with consequent revisions to data from April 2001 to January 2004. For further details, see Information Paper: Forthcoming Changes to Labour Force Statistics, 2003 (cat. no. 6292.0).
33 In May 2007, an improved method of estimation, known as composite estimation, was introduced into the Labour Force Survey. In introducing this change the ABS revised unit record data from April 2001 to April 2007 based on the new estimation method. While estimates for periods prior to April 2001 are unrevised and were compiled using a different estimation method, no trend break was identified in the employed persons series. Also, no change was identified in the trend breaks in the unemployed persons and unemployment rate series which arose with the introduction of a redesigned survey form in April 2001. For further details, see Information Paper: Forthcoming Changes to Labour Force Statistics, 2007 (cat. no. 6292.0).
34 The sample size of the Labour Force Survey for July 2008 was reduced by 24% when compared with the June 2008 sample. Detailed information about the sample reduction is provided in Information Paper: Labour Force Survey Sample Design, Nov 2007 (Second edition) (cat. no. 6269.0), which was released on 25 July 2008.
35 The Labour Force Survey sample has been re-instated. The sample re-instatement was phased in between September 2009 and December 2009, with the December 2009 estimates in Labour Force, Australia (cat. no. 6202.0) being the first produced under the fully re-instated sample. Details of the sample re-instatement are provided in Information paper: Labour Force Survey Sample Design, Nov 2007 (Third Edition) (cat. no. 6269.0) which was released on 1 October 2009.
36 Labour Force Survey estimates are calculated in such a way as to add up to independent estimates of the civilian population aged 15 years and over (population benchmarks). These population benchmarks are projections of the most recently released quarterly Estimated Resident Population (ERP) data. For information on the methodology used to produce the ERP see Australian Demographic Statistics (cat. no. 3101.0). To create the population benchmarks for the Labour Force Survey, the most recently released quarterly ERP estimates are projected forward one quarter past the period for which they are required. The projection is based on the historical pattern of each population component - births, deaths, interstate migration and overseas migration. By projecting one quarter past that needed for the current population benchmarks, demographic changes are smoothed in, thereby making them less noticeable in the population benchmarks.
37 In March 2009 the ABS released the September 2008 issue of Australian Demographic Statistics (cat. no. 3101.0), which included a description of revisions to Net Overseas Migration (NOM) estimates. The revisions of NOM estimates would normally have contributed to population benchmarks underpinning estimates in the April 2009 issue of Labour Force, Australia (cat. no. 6202.0). However, due to the size of the revisions, updating the population benchmarks using the existing methodology would have introduced a large amount of statistical noise into the timeseries. The ABS has decided to redevelop its methodology to improve the consistency of the timeseries. The ABS will revise Labour Force Survey population benchmarks from November 2007 in mid 2010. These will use population estimates published in the September 2009 issue of Australian Demographic Statistics (cat. no. 3101.0), released in March 2010. The revisions will affect estimates such as the number of persons employed and unemployed, but will have negligible affect on estimates of change or rates, such as the unemployment rate.
38 The ERP series are revised annually in the March quarter issue of Australian Demographic Statistics (cat. no. 3101.0), released in September each year, to incorporate more up to date information available for the population components. The revised ERP estimates are used to update the quarterly population projections used in creating the Labour Force Survey population benchmarks. Benchmarks already used in producing the Labour Force Survey estimates are not updated. A process of smoothing is used in the creation of population benchmarks to reduce the effect of these annual revisions to ERP estimates on the Labour Force Survey population benchmarks.
39 Every five years the ERP series are revised to incorporate additional information available from the latest Census of Population and Housing. Following the incorporation of Census information, the ERP series prior to the latest Census are final and subject to no further revision. Labour Force Survey population benchmarks, and the estimates, are revised following this 5-yearly revision in the ERP. From the February 2009 issue of this publication, labour force estimates have been compiled using population benchmarks based on the results of the 2006 Census of Population and Housing. Revisions were made in that issue to historical labour force estimates from January 2001 to January 2009.
40 The estimation method used in the Labour Force Survey is composite estimation, which was introduced in May 2007. Composite estimation combines data collected in the previous six months with current month's data to produce the current month's estimates, thereby exploiting the high correlation between overlapping samples across months in the Labour Force Survey. The Composite Estimator combines the previous and current months' data by applying different factors according to length of time in the survey. After these factors are applied, the seven months of data are weighted to align with current month population benchmarks. For details see Information Paper: Forthcoming Changes to Labour Force Statistics, 2007 (cat. no. 6292.0).
41 The families estimates use family relationship information collected as part of the LFS. The survey questions used to determine family relationships are restricted to persons enumerated as usual residents of private dwellings. That is, the following persons are excluded from the family estimates:
42 Family relationship information is determined for persons enumerated as usual residents of private dwellings that are in scope of LFS. This information is also determined for some additional persons who are enumerated as usual residents of private dwellings and are:
Further information and data on the LFS
43 LFS estimates are published monthly in Labour Force, Australia (cat. no. 6202.0). A series of time series spreadsheets are released at the same time as this publication under cat. no. 6202.0.55.001. More detailed estimates are released, in electronic format, one week later, under cat. no. 6291.0.55.001 for monthly data, or cat. no. 6291.0.55.003 for quarterly data. All electronic data can be accessed via the ABS website at <http://www.abs.gov.au>. Additional data are available on request.
44 For further information about the range of LFS products and services, and the concepts and methodology used in the LFS, refer to Information Paper: Changes to Labour Force Survey Products (cat. no. 6297.0), Labour Statistics: Concepts, Sources and Methods (cat. no. 6102.0.55.001) and Labour Force Survey Standard Products and Data Item Guide, Dec 2009 (cat. no. 6103.0).
45 Table 1.8 contains data from the International Labour Organisation.
46 Estimates of key indicators of the labour markets from selected countries have been included for comparison with Australian estimates of labour force participation, employment, unemployment and unemployment rates.
EMPLOYER SURVEY DATA
47 Tables 2.11-2.12, 5.1-5.3, 6.1-6.2 and 7.1 of this publication contain data from ABS employer surveys.
Scope of employer surveys
48 Except where otherwise noted, the sample for ABS labour employer surveys is selected from the ABS Business Register, which is primarily based on registrations to the Australian Taxation Office's (ATO) Pay As You Go Withholding scheme. The population is updated quarterly to take account of new businesses, businesses that have ceased employing, changes in employment levels, changes in industry, and other general business changes. Businesses excluded from the scope of the employer surveys are:
PUBLIC SECTOR EMPLOYEES DATA
Description of the survey
49 Tables 2.11 and 2.12 contain employment data from the Survey of Employment and Earnings - Public Sector (SEE).
50 The Survey of Employment and Earnings was conducted on a quarterly basis from the September quarter 1983. The June quarter 2007 issue of the publication Wage and Salary Earners, Public Sector, Australia (cat. no. 6248.0.55.001) was the final issue. The quarterly survey has been replaced with an annual survey commencing with the 2007-08 reference year with data available in the publication Employment and Earnings, Public Sector, Australia (cat. no. 6248.0.55.002). The survey measures both the number of public sector wage and salary earners employed at the last pay period of the financial year and the total earnings paid to employees for the financial year.
51 The reference period for employment is the last pay period of the financial year.
Notes on data
52 The private sector component of the Survey of Employment and Earnings was discontinued after the December quarter 2001.
53 The privatisation of Telstra Corporation in November 2006 significantly impacted the public sector employment series. Telstra Corporation was effectively privatised on 20 November 2006. For the purpose of ABS statistics this change from public sector to private sector is effective from March quarter 2007. For more information please see Information Paper: Future Treatment of Telstra in ABS Statistics, 2007 (cat. no. 8102.0).
54 As a result of privatisation, Telstra Corporation was no longer in the scope of SEE, and Telstra data were excluded from the series from March quarter 2007. As a result, a trend break was applied to the Commonwealth government and total public sector employees series between November 2006 and February 2007.
55 For further information about data relating to public sector employees, and the concepts and methodology used, refer to Employment and Earnings, Public Sector, Australia (cat. no. 6248.0.55.002), and Labour Statistics: Concepts, Sources and Methods (cat. no. 6102.0.55.001).
WAGE PRICE INDEX DATA
56 Table 5.1 contains data from the Labour Price Index, Australia (cat. no. 6345.0) publication.
Description of the survey
57 The Labour Price Index (LPI) measures change in the price of labour in the Australian labour market, unaffected by changes in the quality or quantity of work performed, i.e. it is unaffected by changes in the composition of the labour force, hours worked, or changes in characteristics of employees (e.g. work performance). In the LPI, index numbers are compiled for a range of wage and non-wage costs. Information about the wage price indexes has been released for each quarter since September 1997. Approximately 20,000 matched jobs from 4,800 businesses are priced each quarter.
58 The reference period for the survey is the last pay period ending on or before the third Friday of the mid-month of the quarter.
59 For further information about the range of products and services relating to the Wage Price Index, and the concepts and methodology used, refer to Labour Price Index, Australia (cat. no. 6345.0), the associated time series spreadsheets available from the ABS website and Labour Price Index, Concepts, Sources and Methods (cat. no. 6351.0.55.001).
AVERAGE WEEKLY EARNINGS DATA
60 Table 5.2 contains data from the Survey of Average Weekly Earnings (AWE).
Description of the survey
61 The Survey of Average Weekly Earnings has been conducted quarterly since August 1981. Approximately 5,500 businesses contribute to the survey each quarter. The purpose of the survey is to measure average gross weekly earnings of employee jobs in Australia.
62 Average weekly earnings statistics represent average gross (before tax) earnings of employees and do not relate to average award rates nor to the earnings of the 'average person'. Estimates of average weekly earnings are derived by dividing estimates of weekly total earnings by estimates of numbers of employees. Changes in the averages may be affected not only by changes in the level of earnings of employees but also by changes in the overall composition of the wage and salary earner segment of the labour force.
63 The reference period for the survey is the last pay period ending on or before the third Friday of the middle month of the quarter. For non-weekly payrolls, businesses are asked to provide one week's portion.
Notes on data
64 The privatisation of Telstra Corporation in November 2006 has significantly impacted on the private sector and public sector average weekly earnings series. Telstra Corporation was effectively privatised on 20 November 2006. For the purposes of ABS statistics this change from public sector to private sector is effective from March quarter 2007. The effect of this change is significant for both the private sector and public sector series. As a result, a trend break has been applied to both series between November 2006 and February 2007. For more information please see Information Paper: Future Treatment of Telstra in ABS Statistics, 2007 (cat. no. 8102.0).
65 For further information about average weekly earnings statistics and the concepts and methodology used refer to Average Weekly Earnings, Australia (cat. no. 6302.0), and Labour Statistics: Concepts, Sources and Methods (cat. no. 6102.0.55.001).
NATIONAL ACCOUNTS DATA
66 Table 5.3 contains data from the Australian National Accounts.
67 Estimates of compensation of employees are contained within the Income Accounts of the Australian National Accounts, which are published in Australian System of National Accounts (cat. no. 5204.0) and Australian Economic Indicators (cat. no. 1350.0). For further information on how estimates are obtained, see Australian System of National Accounts: Concepts, Sources and Methods (cat. no. 5216.0).
INDUSTRIAL DISPUTES DATA
68 Tables 6.1 and 6.2 contain data from the Industrial Disputes collection.
Description of the survey
69 The ABS has been collecting information about industrial disputes since 1913. The Industrial Disputes collection produces estimates of the number of industrial disputes (where ten or more working days are lost), employees involved, and working days lost.
70 The scope of the Industrial Disputes collection is restricted to employing businesses at which an industrial dispute has occurred. These are identified through a range of sources, including media reports, listings obtained from industrial relations commissions and contact with government organisations, businesses, employer associations and trade unions. For this collection, industrial disputes are defined as work stoppages of ten working days or more. Ten working days are equivalent to the amount of ordinary time worked by ten people in one day, regardless of the length of the stoppage, e.g. 3,000 workers on strike for two hours would be counted as 750 working days lost (assuming they work an eight-hour day).
71 Effects on other establishments not directly involved in the dispute, such as stand-downs because of lack of materials, disruption of transport services, power cuts, etc. are not included in the scope of this collection.
72 The collection reference period is the calendar quarter.
73 For further information about industrial disputes statistics, and the concepts and methodology used, refer to the electronic publication Industrial Disputes, Australia (cat. no. 6321.0.55.001), and Labour Statistics: Concepts, Sources and Methods (cat. no. 6102.0.55.001).
JOB VACANCIES DATA
74 Table 7.1 contains data from the Job Vacancies Survey (JVS).
Description of the survey
75 The Job Vacancies Survey has been conducted since November 1983 and is a quarterly sample survey of approximately 5,000 employers. The survey produces estimates of the number of job vacancies in Australia. The Job Vacancies Survey was not conducted during 2008-09 but was reinstated in November 2009.
76 The reference date for the survey is the third Friday of the middle month of the quarter.
Notes on data
77 Prior to the August quarter 1999, job vacancies statistics were collected as part of the Job Vacancies and Overtime Survey. The overtime component of the survey ceased following the May quarter 1999.
78 The privatisation of Telstra Corporation in November 2006 impacted the private sector and public sector job vacancies series. For the purposes of ABS statistics this change from public sector to private sector was effective from March quarter 2007. For more information please see Information Paper: Future Treatment of Telstra in ABS Statistics, 2007 (cat. no. 8102.0).
79 Although the privatisation of Telstra Corporation in November 2006 impacted on both the private and public sector series, the effect was significant only for the public sector series. As a result, a trend break was applied to the public sector series between November 2006 and February 2007.
80 As a result of JVS being suspended for 2008-09, there will be a gap in all series: original, seasonally adjusted and trend, for five quarters between August 2008 and August 2009 inclusive. The ABS cannot produce reliable estimates by collecting this missing data retrospectively, and has not been able to fill the gap with other data sources and modeling techniques.
81 For Further information on the changes to Job Vacancies Survey, refer to the Information Paper, Reinstatement of Job Vacancies Survey (cat. no. 6354.0.55.001).
82 For further information about the range of products and services relating to ABS job vacancies statistics, and the concepts and methodology used, refer to Job Vacancies, Australia (cat. no. 6354.0), the associated time series spreadsheets available from the ABS website and Labour Statistics: Concepts, Sources and Methods (cat. no. 6102.0.55.001).
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