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 http://www.dailytelegraph.com.au/news/national/australia-in-the-grip-of-a-jobs-crisis/story-e6freuzr-1226227990029 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.