Bureau of Statistics admits blundering on jobless figures

THE Australian Bureau of Statistics has got the official employment figures wrong, and the bureau says it will not correct them because it would cost too much money.
Nanjing Night Net

The figures are used by the Reserve Bank and Treasury as a key economic indicator.

Officially, employment did not grow at all last year after surging 363,500 in 2010. But yesterday the assistant statistician Paul Mahoney told a seminar that job numbers probably climbed 30,000 to 35,000 more than officially acknowledged in the first nine months last year and increased 60,000 to 70,000 less than acknowledged in 2010.

This means official figures overstated the weakness in the labour market that led the Reserve Bank to cut rates at the end of last year and overstated the strength that led it to push up rates at the end of 2010.

“We acknowledge we have problems with the way we are benchmarking the labour force at the moment,” Mr Mahoney said. “We are not hiding behind this, we are being very open about it. This is a public seminar, this is going to be repeated a few times.”

The employment figures are calculated from a door-to-door survey of about 29,000 households. To turn the results into a national number, it has to estimate the size of the population.

Usually it gets the estimate right. But at times when the rate of population growth is changing rapidly it can get it wrong.

In 2010 it overestimated the growth of the population, in turn leading to overestimate employment growth. Instead of correcting the published figure, it understated its estimate of population growth last year.

As a result the published employment figures for last year were flat, whereas the reality was continued jobs growth.

Mr Mahoney said yesterday the difference was not “statistically significant”, but acknowledged they were significant in terms of presentation, making it look as if jobs growth had stopped last year when it almost certainly had not.

“Yes, it does change the story,” he told the Herald.

To improve the bureau’s processes might cost $1.5 million and take more than a year – but it has had its capital budget cut 25 per cent.

“We are certainly considering changing our processes and looking at how we might fund it,” Mr Mahoney said. “But we are far more capital constrained than we were. This is just one system within the organisation. There are competing demands.”

The bureau will attempt to save money by moving its monthly employment survey online, posting passwords and login codes to the households that take part rather than visiting them and following up with phone calls. It will also abolish or make less frequent a number of less-important labour force surveys.

The unemployment rate, presently 5.1 per cent, is unaffected by the bureau’s problems with its measure of employment.

This story Administrator ready to work first appeared on Nanjing Night Net.