Economists and policy makers have been left in the dark over the state of the labour market, uncertain about the reliability of the latest jobs figures.
Policy makers and economists, including those at the Reserve Bank, are none the wiser about the state of the labour market after the latest jobs figures.
These numbers are crucial when gauging the performance of the economy and the appropriate level of interest rates.
But the current batch have been rendered virtually useless because of changes by the Australian Bureau of Statistics to deal with extreme volatility in the data series.
As one economist quipped, it has become the “Australian labour farce report”.
Taken at face value, the jobless rate rose to an 11-year high of 6.1 per cent in September after a revised six per cent in both August and July.
August was originally reported as 6.1 per cent and July 6.4 per cent.
Thursday’s data also showed the number of people employed in September fell by 29,700.
This comprised a 21,600 increase in full-time employment, but a 51,300 fall in part-time workers.
The August employment numbers were heavily revised to a 32,100 increase from an extraordinary increase of 121,000 increase.
The figures usually scrutinised by economists are adjusted to remove the effect of regular seasonal influences on the data.
But warning of revisions on Wednesday, the ABS said there was very little evidence of the usual seasonality in the July, August and September figures.
It instead used original figures.
The ABS is reviewing with independent external input an appropriate method for seasonal adjustment for the October figures and those afterwards.
“In the meantime we are left in the dark as to the state of the labour market,” TD Securities head of Asia Pacific research Annette Beacher said.
Treasurer Joe Hockey is understandably unhappy and says he’ll present cabinet in a few weeks with some options to make the bureau “more contemporary”.
But he told reporters in Washington, he won’t be “writing a blank cheque” to sort it out.
Employment Minister Eric Abetz expects it will be some months before it is possible to gauge longer-term trends based on the revised methodology.
But he said the figures demonstrate the need for the Senate to back government measures to help create more job opportunities.
“Whether it is 6.1, or 6.4, or indeed a 5.8 per cent unemployment rate, it would still be too high,” Senator Abetz told reporters in Hobart.
Opposition employment spokesman Brendan O’Connor said the unemployment rate is now higher than that of the US, something that never happened under the previous Labor government.
“It is an unemployment rate that is inexcusable,” Mr O’Connor told reporters in Melbourne.