Wednesday, 21 December 2011

Waterboarding the employment data to make it tell you what you want

It is not clear whether the reporting or the report is to blame, but this story in today’s Daily Telegraph is build on foundations of sand.

The claim in the article that:

  • research firm CoreData suggested the number of unemployed people in Australia will jump by nearly 106,000 next year, assuming the labour force grows at its current rate and the unemployment rate rose to 5.75 per cent, as predicted”.

Here are some facts and scenarios:

As at November 2011:

  • employment in Australia was 11,457,100;
  • the labour force 12,092,900;
  • the number of unemployed was 635,800; and
  • the unemployment rate was 5.3%.

If we assume the same growth for the labour force for the last 12 months (0.46%) out to November 2012, the labour force will rise to 12,148,500. If in those circumstances, the unemployment rate forecast of 5.75% proves to be correct, the number of unemployed will 698,500. That’s a rise in unemployment of 62,700.

By the way, based on the 0.46% rise in the labour force over the next year, if the unemployment rate happens to come in a 5.5%, the rise in unemployment would be 29,400 people. If the unemployment rate were to be 6.0%, the number of unemployed would rise by 93,100. If the unemployment rate happens to be 5.0%, the number of unemployed would fall by 28,400.


  1. Channel 9 Melbourne is reporting that "100,000 are set to lose their jobs next year". Sigh.

  2. That's great stuff. Did you also bag out the govt for claiming, as some kind of record achievement, that they would create 500,000 jobs over two years in the budget?

    What about when they lowered that stat to 300,000 the other week?

  3. drpage - let's see how the economy goes. It's a forecast. The Daily Telegraph stoy and / or the CoreData "research" is just a data input / output mechanism.

  4. That's not how Wayne Swan explained it.

    "WAYNE Swan has rejected calls for a large boost to permanent migration as he pledged his Budget would create 500,000 new jobs and drive unemployment to 4.5 per cent."

  5. Thanks for that. But since the Budget, the GDP forecasts were slashed due to global events - and the labour market will as a result be weaker. And I can't recall the 500,000 jobs being on page 1 of the Tele.