Today’s Australian Employment report for January 2019 was good — but it was actually better than it looked. The reason is the sample rotation actually biased the results down. The incoming group was a weak group (Low employment and high unemployment) and the outgoing group was a strong one (high employment and Low unemployment).
Despite this we had strong jobs growth, strong full time jobs gains, an increase in the employment to population ratio and a decline of the underemployment rate.
Here’s what the ABS had to say about the matter:
In original terms, the incoming rotation group in January 2019 had a lower employment to population ratio (63.6% in December, down to 61.0% in January 2019) than the group it replaced, and was lower than the ratio for the entire sample (61.7%).
The full-time employment to population ratio of the incoming rotation group was lower than the group it replaced (43.6% in December, down to 42.6% in January 2019), and was lower than the ratio for the entire sample (42.8%).
The unemployment rate of the incoming rotation group was 1.0 pts higher than the whole sample (6.4%, compared to 5.4%), and it replaced a group with a lower rate (4.1%). Its participation rate was below that of the sample as a whole (65.2%, compared to 65.3%), and below the group it replaced (66.3% in December 2018).