INSIGHTS FROM THE ORIGINAL DATA


SAMPLE COMPOSITION

The Labour Force Survey sample can be thought of as comprising eight sub-samples (or rotation groups), with each sub-sample remaining in the survey for eight months, and one rotation group "rotating out" each month and being replaced by a new group "rotating in". This sample rotation is important in ensuring that seven-eighths of the sample are common from one month to the next, to ensure that changes in the estimates reflect real changes in the labour market, rather than the sample. In addition, the replacement sample is generally selected from the same geographic areas as the outgoing one, as part of a representative sampling approach.

When considering movements in the original estimates, it is possible to decompose the sample into three components:

• the matched common sample (survey respondents who responded in both August and September);
• the unmatched common sample (survey respondents who responded in September but who did not respond in August, or vice versa); and
• the incoming rotation group (survey respondents who replaced respondents who rotated out in August).

The detailed decomposition of each of these movements is included in the data cube 'Insights From the Original Data'.

In considering the three components of the sample, it is important to remember that the matched common sample describes the change observed for the same respondents in August and September, while the other two components reflect differences between the aggregate labour force status of different groups of people.

While the rotation groups are designed to be representative of the population, the outgoing and incoming rotation groups will almost always have somewhat different characteristics, as a result of the groups representing a sample of different households and people. The design of the survey, including the weighting and estimation processes, ensures that these differences are generally relatively minor and seeks to ensure that differences in characteristics of rotation groups do not affect the representativeness of the survey and its estimates. Monthly estimates are always designed to be representative of their respective months, regardless of the relative contribution of the three components of the sample.


INCOMING ROTATION GROUP

In original terms, the incoming rotation group in September 2018 had a higher employment to population ratio (59.7 per cent in August, up to 61.9 per cent in September 2018) than the group it replaced, and was lower than the ratio for the entire sample (62.1 per cent).

The full-time employment to population ratio of the incoming rotation group was higher than the group it replaced (40.3 per cent in August, up to 42.3 per cent in September 2018), and was lower than the ratio for the entire sample (42.4 per cent).

The unemployment rate of the incoming rotation group was 0.5 percentage points lower than the whole sample (4.4 per cent, compared to 4.9 per cent), and it replaced a group with a higher rate (5.6 per cent). Its participation rate was below that of the sample as a whole (64.8 per cent, compared to 65.3 per cent), and above the group it replaced (63.2 per cent in August 2018).


OUTGOING ROTATION GROUP

In looking ahead to the October 2018 estimates, the outgoing rotation group in September 2018, which will be replaced by a new incoming rotation group in October 2018, has a lower employment to population ratio (61.9 per cent in September 2018) than the sample as a whole (62.1 per cent) in original terms. The full-time employment to population ratio (42.3 per cent) is lower than the ratio for the entire sample (42.4 per cent).

The unemployment rate for the outgoing rotation group in September 2018 is higher than the sample (5.6 percent, compared to 4.9 per cent). The participation rate for the outgoing rotation group in September 2018 is lower than the sample (64.8 per cent, compared to 65.3 per cent).


UNEMPLOYMENT RATE CHANGE

The decrease in the seasonally adjusted unemployment rate from 5.3 percent in August to 5.0 percent in September occurred in all states and territories and for both males and females. The original data showed that the unemployment rate decreased across each of the rotation groups. The original data also showed that the unemployment rate decreased for each five year age interval, apart from 15-19 year olds, 50-54 year olds and those aged 65 years and over. The decrease in the original unemployment rate for 20-24 year olds was the largest of all age intervals.


THE IMPORTANCE OF TREND DATA

As the gross flows and rotation group data are presented in original terms they are not directly comparable to the seasonally adjusted and trend data discussed elsewhere in the commentary, and are included to provide additional information for the original data. Since the original data are unadjusted, they have a considerable level of inherent sampling variability, which is specifically adjusted for in the trend series. The trend data provide the best measure of the underlying behaviour of the labour market and are the focus of the commentary in this publication.