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1504.0 - Methodological News, Sep 2003  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 27/02/2004   
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LABOUR FORCE SURVEY SEASONAL ADJUSTMENT ENHANCEMENTS

An enhanced seasonal adjustment will be implemented in the November 2003 reference month. The enhancements include taking into account two identified calendar related effects and implementing the concurrent seasonal adjustment method.

Identified calendar effects

Other than in December and January, Labour Force Survey (LFS) interviews are generally conducted over two weeks, beginning on the Monday between the 6th and 12th of the month. Two calendar related effects have been found in some Australia level aggregates: January Interview Start Date effect; and Easter effect in April.

Each year LFS interviews for December start four weeks after November interviews start, and January interviews start five weeks after December interviews start. As a result, January interviewing may commence as early as the 8th or as late as the 14th. Employment conditions change markedly around the Christmas and New Year holiday period. A changing interview date for January may impact on the survey estimates. A significant January interview start date effect has been found in adult Female Employed and Female Part-time Employed series.

The timing of Easter with respect to the interview fortnight can impact on the survey estimates for some series in the month of April. Five different timings of Easter Monday in relation to the start of the survey fortnight for April are possible. Easter Monday could:

  • occur a week before the survey period;
  • coincide with the start of the first week of the survey reference period;
  • coincide with the start of the second week of the survey reference period;
  • immediately follow the end of the reference period; or
  • fall a week after the end of the reference period.

When Easter Monday coincides with the start of the second week of the survey reference period, a significant negative effect is found in the adult Female Employed and Female Part-time Employed series. A complementary positive effect is also found in Female Not in the Labour Force series.

Change in seasonal adjustment approach

Traditionally, the labour force times series have used forward factor seasonal adjustment, which is generally estimated once per year. This method relies on an annual analysis of the latest available original data to project seasonal factors (known as forward factors) that will be applied in the forthcoming 12 months.

Alternatively, concurrent seasonal adjustment uses the original time series available at each reference period to estimate seasonal factors for the current and previous months. Concurrent seasonal adjustment is technically superior to the annual forward factor method because it uses all available data to fine tune the estimates of seasonal component at each period. The ABS has demonstrated the advantages of concurrent seasonal adjustment methodology in terms of improved seasonal factor estimates and revision reduction. Concurrent seasonal adjustment has been implemented on many other ABS time series with positive user acceptance of these changes. It has been decided to implement concurrent seasonal adjustment for labour force times series starting in the November 2003 reference month.

For more information, please contact Mark Zhang on (02) 6252-5132.

Email: mark.zhang@abs.gov.au.

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