Feature Article 2: Hours Worked Estimates in the Quarterly National Accounts
In March quarter 2005, the ABS suspended publication of seasonally adjusted hours worked estimates to assess the quality of the time series. Investigation has revealed some issues with the application of holiday correction factors that are applied to the hours worked series prior to normal seasonal adjustment. These factors have been re-estimated and the seasonally adjusted hours worked series and the associated seasonally adjusted GDP per hour worked series have been reintroduced for the June quarter 2005 National Accounts publication.
The aim of holiday correction is to estimate and remove holiday impacts prior to seasonal factor estimation. The extent of the impact of a particular holiday will depend on how different persons are affected by that holiday. For example, there may be different reactions to specific holidays in different states, in metropolitan/ex-metropolitan areas and in different industries. For some holidays the effect may not be consistent from year to year due to factors such as the different dates of public holidays in different states. Estimated holiday correction factors were found to be statistically significant for the following holidays: (i) Easter, (ii) the start date of the Labour Force Survey in January; (iii) Queen's Birthday; (iv) Australia Day; and (v) school holidays in particular months.
The chart below shows a comparison over the last five years of published quarterly movements in the seasonally adjusted estimates. The seasonally adjusted movements are very similar but show increasing divergence during 2004. For example, the estimated December 2004 percentage movement has now been published as 0.7%, compared to an initially published estimate of 0.1%. These differences reflect the updated holiday corrections applied in the seasonal adjustment of hours worked estimates and the revision of seasonally adjusted estimates as additional original estimates have become available.
Hours worked estimates, Seasonally adjusted - As published Dec-04 and Jun-05
Click here for the full feature article 'Issues with Seasonal Adjustment of Hours Worked'.