ABS Unemployment Figures Defy Logic
The latest unemployment figures released by the ABS earlier today defy common logic. The ABS figures show unemployment in October falling to 5.2% (down 0.1%) against the trend of many other indicators.
The Roy Morgan unemployment figures for October show a spike in unemployment in October to 8.6% (up 0.9% to its highest since March 2004). Roy Morgan unemployment figures also show an estimated 7.1% (up 0.9%) of the workforce is underemployed. This means a total of 15.7% (1.87 million) Australians are either unemployed or underemployed — the highest since December 2010.
It is the first time that over 1 million Australians have been unemployed since January 2002 — nearly a decade ago.
As written by Nick Gardner and published in The Daily Telegraph on TuesdayNovember 8, 2011:
- ‘We’ve been hearing anecdotes about layoffs for some time but until now it hasn’t really shown up in the data’ — Shane Oliver, AMP Capital Chief Economist;
- ‘Many economists show the ABS data is flawed. The Roy Morgan data gives a more realistic view of the state of the labour force,’ says Bill Mitchell, professor of economics at the University of Newcastle. ‘The way the ABS frames its questions means that huge numbers of unemployed workers are simply not counted.’ Professor Mitchell said to get a more realistic sense of unemployment, you should “double” the ABS figure.’
“The Roy Morgan Unemployment estimate is obtained by surveying an Australia-wide cross section by face-to-face interviews. An unemployed person is classified as part of the labour force if they are looking for work, no matter when. The results are not seasonally adjusted and provide an accurate measure of monthly unemployment estimates in Australia.
“The Australian Bureau of Statistics Unemployment estimates are obtained by mostly telephone interviews. Households selected for the ABS Survey are interviewed each month for eight months, with one-eighth of the sample being replaced each month. The first interview is conducted face-to-face. Subsequent interviews are then conducted by telephone.
“The ABS classifies an unemployed person as part of the labour force only if, when surveyed, they have been actively looking for work in the four weeks up to the end of the reference week and if they were available for work in the reference week.
“The Australian Bureau of Statistics Unemployment estimates are also seasonally adjusted.
“For these reasons the Australian Bureau of Statistics Unemployment estimates are different from the Roy Morgan Unemployment estimate.
“My concerns regarding the ABS Unemployment estimate are clearly outlined in my letter to the Australian Financial Review (August 22, 2003), which was not published!”