INSIGHTS FROM THE ORIGINAL DATA


SAMPLE COMPOSITION

The Labour Force Survey sample can be thought of as comprising eight sub-samples (or rotation groups), with each sub-sample remaining in the survey for eight months, and one rotation group "rotating out" each month and being replaced by a new group "rotating in". This sample rotation is important in ensuring that seven-eighths of the sample are common from one month to the next, to ensure that changes in the estimates reflect real changes in the labour market, rather than the sample. In addition, the replacement sample is generally selected from the same geographic areas as the outgoing one, as part of a representative sampling approach.

When considering movements in the original estimates, it is possible to decompose the sample into three components:

• the matched common sample (survey respondents who responded in both August and September);
• the unmatched common sample (respondents in September who did not respond in August, or vice versa); and
• the incoming rotation group (who replaced respondents who rotated out in August).

The detailed decomposition of each of these movements is included in the data cube 'Insights From the Original Data'.

In considering the three components of the sample, it is important to remember that the matched common sample describes the change observed for the same respondents between August and September, while the other two components reflect differences between the aggregate labour force status of different groups of people.

While the rotation groups are designed to be representative of the population, the outgoing and incoming rotation groups will almost always have somewhat different characteristics, as a result of the groups representing a sample of different households and people. The design of the survey, including the weighting and estimation processes, ensures that these differences are generally relatively minor and seeks to ensure that differences in characteristics of rotation groups do not affect the representativeness of the survey and its estimates. Monthly estimates are always designed to be representative of their respective months, regardless of the relative contribution of the three components of the sample.


INCOMING ROTATION GROUP

In original terms, the incoming rotation group in September 2016 had a lower employment to population ratio than the group it replaced (58.8% in August 2016, down to 58.3% in September 2016).

The proportion of employed people who were employed full-time was slightly higher than the group it replaced, with 69.2% of employed people employed full-time in the outgoing rotation group in August 2016 and 69.3% of employed people in the incoming rotation group in September 2016.


INCOMING ROTATION GROUP - QUEENSLAND

The incoming rotation group in Queensland in September 2016 was noticeably different in its labour force characteristics to the group that it replaced, and to the rest of the Queensland sample rotation groups, with a greater level of influence on the current month’s estimate and movement estimate than usual.

Through the Composite Estimation process the ABS has temporarily reduced the influence of this rotation group for September estimates and this is reflected in original, seasonally adjusted and trend estimates. This means that the remaining 7/8 of the Queensland sample will have a higher influence and contribution to the September estimates, with a marginal increase in standard errors for the estimates for this month.

The ABS will review this when October data for this rotation group are available. In the meantime, the ABS encourages users of the GM1 data cube to exercise caution in interpreting incoming and outgoing rotation group changes for Queensland, and, to a lesser extent, Australia.


OUTGOING ROTATION GROUP

In looking ahead to the October 2016 estimates, the outgoing rotation group in September 2016, which will be replaced by a new incoming rotation group in October 2016, had a slightly lower employment to population ratio (60.7% in September 2016) compared to the sample as a whole (60.8% in September 2016).

In original terms, the unemployment rate for the outgoing rotation group in September 2016 was 5.2%, which was lower than the 5.5% for the whole sample. The participation rate for the outgoing rotation group in September 2016 was 64.0%, slightly lower than the 64.3% for the whole sample.


THE IMPORTANCE OF TREND DATA

As the gross flows and rotation group data are presented in original terms they are not directly comparable to the seasonally adjusted and trend data discussed elsewhere in the commentary, and are included to provide additional information for the original data. Since the original data are unadjusted, they have a considerable level of inherent sampling variability, which is specifically adjusted for in the trend series. The trend data provide the best measure of the underlying behaviour of the labour market and are the focus of the commentary in this publication.