Economy

Aug 11, 2014

ABS cuts could undermine jobs data accuracy

Budget cuts mean there's a question mark over how accurate the new set of jobs data really is, Glenn Dyer writes.

Glenn Dyer — <em>Crikey</em> business and media commentator

Glenn Dyer

Crikey business and media commentator

If the Australian Bureau of Statistics had to measure the satisfaction with last Thursday’s July jobs data release among its wide and varied clientele, it would have found some very unhappy bunnies — from the Reserve Bank to the Federal Treasury, to quite a few business and private economists in banks large and small. The surprise jump in the headline unemployment rate to 6.4% prompted much commentary about the condition of the economy, but looking at the report, the trend unemployment rate, which rose to 6.1% in July, seems to be more accurate than the 6.4% headline figures.

At the moment the ABS jobs series is the most closely watched economic indicator: policymakers have been anticipating a rise in unemployment for over a year, and the rise in the unemployment rate is particularly important and sensitive given the sluggish growth in the economy and the fact that jobs growth in not keeping pace with growth in the labour market. The RBA said in its third Statement of Monetary Policy of the year on Friday it foresaw no real improvement in the jobs market until 2016 — that’s a year longer than what it was thinking earlier in the year. So naturally, accurate and timely data on the jobs market is vital.

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2 comments

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2 thoughts on “ABS cuts could undermine jobs data accuracy

  1. Luke Hellboy

    “There is no evidence that the introduction of the new active job search steps and the changing of two active steps to passive has had a significant impact on the estimates for unemployment and not in the labour force.”

    If you don’t look for evidence, you won’t find any. Ignorance is bliss… until the financial decisions made in light of these “figures”clash with reality.

  2. Kevin_T

    Am I understanding that correctly, if you are starting your own business you are now included in the unemployment figures?

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