LABOUR FORCE COMMENTARY FEBRUARY 2015


FEBRUARY 2015 ESTIMATES

As part of the change program implemented from early 2014 to enhance the analysis of labour market dynamics, the first Participation, Job search and Mobility supplementary survey* was conducted in conjunction with the February 2015 Labour Force Survey. The independent technical review of the Labour Force Survey, released on 9 December 2014, concluded that changes to the supplementary survey program were the major reason for volatile Labour Force estimates from July to September 2014 and that particular care should be taken in the months when new supplementary surveys are conducted. In response to the independent review the ABS introduced a set of prior corrections, with the October 2014 estimates, which removed this source of volatility from the seasonally adjusted and trend estimates. The same methodology has been used to estimate and remove the impact of the Participation, Job search and Mobility supplementary survey from the February 2015 data. Please see the article Removing the effect of supplementary surveys from seasonally adjusted estimates from the October 2014 Labour Force publication for further details on the correction methodology.

The ABS recommends using trend estimates, at both national and state levels, to analyse the underlying behaviour of the series. Care should always be exercised when using the original estimates as they contain irregular, seasonal and systematic influences, including impacts from the timing of supplementary surveys. The seasonal and systematic influences are estimated and removed from the original series to produce the seasonally adjusted estimates. For further information on seasonal adjustment and interpreting time series, please refer to 1346.0.55.003 Interpreting time series: Are you being misled by the seasons.

* The Participation, Job search and Mobility supplementary survey combines four previously separate supplementary surveys: Labour mobility was conducted biennially from February 1992 to February 2012 and repeated in February 2013; Job search experience was conducted annually in July each year until 2013; and, Persons not in the labour force and Underemployed workers were conducted annually in September each year until 2013. In February 2014 Job search experience, Persons not in the labour force and Underemployed workers were conducted together.


NATIONAL ESTIMATES

Australia's unemployment rate decreased 0.1 percentage points to 6.3% in February 2015 (seasonally adjusted) with:

• the number of unemployed persons decreasing by 15,800 to 777,300,
• the number of employed persons increasing by 15,600 to 11,652,400, and
• the participation rate decreasing 0.1 percentage points to 64.6%.

The seasonally adjusted underemployment rate was 8.6% in February 2015, a decrease of 0.1 percentage points from November 2014 based on unrounded estimates. Combined with the unemployment rate of 6.3%, the latest seasonally adjusted estimate of total labour force underutilisation was 14.9% in February 2015, a decrease of 0.1 percentage points from November 2014. In trend terms, the underemployment rate increased 0.2 percentage points to 8.7% in February 2015 and total labour force underutilisation increased 0.3 percentage points to 15.1%.

In trend terms the unemployment rate was unchanged at 6.3% in February 2015. The number of employed persons in February 2015 increased by 14,000 to 11,654,000 and the number of unemployed persons increased by 2,900 to 781,600 in trend terms. The trend participation rate was unchanged at 64.7% in February 2015.

The employment to population ratio, which expresses the number of employed persons as a percentage of the civilian population aged 15 years and over, was unchanged at 60.6% (seasonally adjusted) in February 2015. In trend terms, the employment to population ratio was also unchanged at 60.6%.

Seasonally adjusted full-time employment increased by 10,300 persons to 8,062,000 persons while part-time employment increased by 5,300 to 3,590,400 persons in February 2015. The increase in total employment resulted from:

• an increase in male full-time employment, up 9,000 persons
• an increase in female part-time employment, up 5,100 persons
• an increase in female full-time employment, up 1,200 persons
• an increase in male part-time employment, up 300 persons.

Seasonally adjusted aggregate monthly hours worked increased 13.0 million hours (0.8%) in February 2015 to 1,620.8 million hours.


STATE ESTIMATES

The largest absolute increases in seasonally adjusted employment were in Victoria (up 12,800 persons) and Queensland (up 8,100 persons). The largest absolute decrease in seasonally adjusted employment was in South Australia (down 7,200 persons).

The largest decreases in the seasonally adjusted participation rate were in South Australia (down 0.8 percentage points) and Tasmania (down 0.3 percentage points) while the largest increases were in Queensland (up 0.2 percentage points) and Western Australia (up 0.2 percentage points).

The largest decreases in the seasonally adjusted unemployment rate were in Victoria (down 0.5 percentage points) and South Australia (down 0.3 percentage points). The largest increase in the seasonally adjusted unemployment rate was in Western Australia (up 0.2 percentage points). The ABS recommends using trend estimates to analyse the underlying behaviour of the series.

Seasonally adjusted estimates are not published for the territories.

Unemployment rate, States and Territories, January 2015 and February 2015
	Trend		Seasonally Adjusted
	January	February	January	February
	%	%	%	%
New South Wales	6.2	6.3	6.3	6.3
Victoria	6.4	6.3	6.6	6.0
Queensland	6.6	6.5	6.5	6.7
South Australia	6.9	7.0	7.2	6.9
Western Australia	5.7	5.8	5.6	5.8
Tasmania	6.6	6.5	6.6	6.6
Northern Territory	4.1	4.3	np	np
Australian Capital Territory	4.6	4.5	np	np
Australia	6.3	6.3	6.4	6.3
np not available for publication but included in totals where applicable, unless otherwise indicated

GROSS FLOWS

Gross flows (Table 17) highlight the change in labour force status of individuals between last month and this month. Gross flows are derived from the sample that is common between two consecutive months which, after taking account of sample rotation and varying non-response each month, is approximately 80% of the sample. However, the level and movement estimates produced from the Gross flows will not necessarily represent 80% of the level and movement estimates in a given month from the whole sample. Despite this limitation, analysis of the gross flows data can provide an indication, in original terms, of underlying movements in the labour market.

Estimates for February 2015 in original terms include impacts from the timing of the Participation, Job search and Mobility supplementary survey. These impacts will be reflected in gross flows data between January and February 2015 and should be considered when interpreting the gross flows.

In original terms between January and February 2015 the number of persons employed increased by 260,400 with gross flows showing a net increase of 168,100. The increase shown in the gross flows comprised:

• 148,000 persons whose status changed from unemployed to employed,
• 292,200 persons whose status changed from not in the labour force to employed,
• 79,700 persons whose status changed from employed to unemployed, and
• 192,300 persons whose status changed from employed to not in the labour force.

In original terms between January and February 2015 the number of persons unemployed increased by 1,300 with gross flows showing a net increase of 4,000. The increase shown in the gross flows comprised:

• 79,700 persons whose status changed from employed to unemployed,
• 201,100 persons whose status changed from not in the labour force to unemployed,
• 148,000 persons whose status changed from unemployed to employed, and
• 128,800 persons whose status changed from unemployed to not in the labour force.

As the gross flows data are presented in original terms they are not directly comparable to the seasonally adjusted and trend data discussed elsewhere in the commentary.


ABOUT THE DATA

There can be statistical volatility in any sample survey and while standard errors provide one measure of statistical volatility, it is not possible to be precise about the impact of statistical volatility for any given estimate. However, the ABS will continue to investigate whether it is possible to modify in future its estimation methodology for Labour Force statistics to reduce its extent. This investigation is consistent with the recommendations of the recent independent review into the Labour Force Survey, but will take some time. Statistical volatility is dampened in the trend estimates, and the ABS encourages users to consider these along with the seasonally adjusted and original series in understanding underlying trends in the labour market.