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An afternoon with the ABS

When looking at the Labour force survey for August 2015, I noticed the seasonally adjusted figure showing the number of employed people in July (they show the month before) was 52,400 lower than had been quoted in the July release – the release which caused Joe Hockey to crow about creating 38,500 jobs in the month. How could this be?

A few phone calls and some reading later I got my answer. (And thanks to the people at the ABS who are always happy to help despite funding cuts).

In February 2015 the ABS went back and revised employment estimates for the previous 44 months (back to the 2011 census) based on the population benchmarks from the Australian Demographic Statistics, Jun 2014. They were then to continue this practice of revision on a quarterly basis (leaving out May 2015 – I assume the government was too busy to give them the info) revising estimates for the previous 25 months each time. I do not know if they were directed to do this or whose decision it was.

When this new approach was introduced in February the accompanying notes said

“Changes to the population benchmarks impact primarily on the level of the Labour Force estimates (i.e. employed, unemployed and not in the labour force) that are directly related to the underlying size of the population.”

The main driver of change in estimated resident population (ERP) is net overseas migration (NOM). The ABS gets this information from the Department of Immigration and Border Protection. The notes from February also said

“The release of Overseas Arrivals and Departures, Australia (cat. no. 3401.0) for the period October 2014 to April 2015 will be delayed. The delay is due to passenger card processing issues as announced by the Department of Immigration and Border Protection (DIBP).”

One wonders what the hell they were doing that, for 7 months, DIBP couldn’t process passenger cards – a fairly crucial part of immigration one would think.

When I asked how, after updating the estimates in February, there could be such a huge discrepancy by August, I was told the ERP of people aged 15+ in July been revised down by 77,000. Barring a plague or natural disaster, this indicated that the information used in and since February about NOM was way out.

These revisions have a cumulative effect as they go back in time. The trend figure for the number of people employed in September 2013 now has gone down from 11,646,800 to 11,452,500 – a drop of 194,300. This makes a significant difference to claims about job creation.

Speaking of which, I asked the people at the ABS about job creation numbers. They said that the number of jobs created would be less than the increase in the number of people employed because most of the newly employed people were part time and not necessarily in new jobs.

So what I have gleaned from this exercise is that the DIBP need less spin doctors and more people actually doing their job, and that the number of people employed, and hence any inference about job creation figures, can be manipulated in the blink of an eye by “rebenchmarking” – a process which changes history significantly dependent on migration figures that the DIBP either can’t get around to doing or can’t get right.

 

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11 comments

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  1. Blinkyewok

    Govt fudging figures?

  2. Kaye Lee

    Kate,

    The updated figures can be found in the August Labour Survey under the Downloads tab and then go to Table 1 and then, from the spreadsheet, go to employed total persons, either trend or seasonally adjusted (or original?). I am still navigating my way around. It seems previous releases have not been updated. You have to look at the latest. There is to be another demographic release (population estimate) later in September which will presumably change it all again. They seem to be saying that births and deaths are easy enough to estimate so I am assuming the discrepancy in population estimates is coming from migration. I don’t yet understand how a difference of 77,000 in population estimate could lead to a change of 52,400 in employed people estimate. It doesn’t seem right considering size of survey. In depth questions about Labour Force survey can be answered at (02) 6252 6525.

    http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6202.0Aug%202015?OpenDocument

  3. Kate M

    Kaye – yes I downloaded it to have a look. That still seems like a remarkable difference.
    Will be interested to hear what else you find.
    Cheers

    K

  4. Kaye Lee

    Kate I just added more info to previous comment. We are thinking the same. The discrepancy is too big.

  5. Kate M

    Yep. Looking at their notes on the original data they published back in September 2013 – as you probably have – they reference in the notes the “Rebuild of the Overseas Arrivals and Departures System”. I had a look at the note in detail – and in that they say that:

    “The impact on Final NOM time series data will be only marginal (i.e. generally less than 30 people), which in turn results in a similarly negligible revisions to population estimates used to produce Labour Force benchmarks.”

    That’s 30 people – not 200,000.

    And the lower number in their confidence interval adjustments, allows for the potential for the number to be up to 48,100 lower. But again – not close to 200,000. That’s a massive adjustment.

  6. Kaye Lee

    52,400 in one month from July to August, considering they had already updated in February, is even worse. Are we playing think of a number here?

    The survey size covers approximately 0.32% of the civilian population of Australia aged 15 years and over. Figures extrapolated from that on a decrease of 77,000 in population estimate just doesn’t work.

  7. Kate M

    It all smells quite fishy to me. It literally doesn’t add up – not by any stretch of logic. The census was only in 2011 – which should have given them a fairly solid baseline to estimate 2013 numbers on.

    There’s more to this than meets the eye methinks…….

  8. Kaye Lee

    Tony is most proud of creating 335,000 jobs. I didn’t realise they were just accounting entries.

  9. Kate M

    Here’s some more numbers to add to the fishy smell. Since the ABS are saying it’s because they hadn’t processed passenger cards – I took a look at total permanent departures from September 2013 to July 2015 (the latest release) – and there were only 169,000 permanent departures during this time.

    So even if we assumed that every single one of them was in the workforce before departing, AND that nobody immigrated and took their place – it still doesn’t get close to the 200,000.

  10. stephentardrew

    Great research Kaye Lee and input Kate M. It most certainly smells fishy. Time to dig deeper.

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