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 May and June);
• the unmatched common sample (respondents in June but who did not respond in May, or vice versa); and
• the incoming rotation group (who replaced respondents who rotated out in May).

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 between May and June, 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 June 2016 had a lower Employment to Population ratio than the group it replaced (63.6% in May and 63.1% June 2016). The proportion of employed people who were employed full-time was also lower than the group it replace (69.5% in May 2016 and 67.3% in June 2016).

The proportion of men employed full-time was lower in the incoming rotation group when compared to the group it replaced (82.5% in May 2016 and 80.1% in June 2016). The proportion of women employed full-time was also lower in the incoming rotation group when compared to the group it replaced (53.9% in May 2016 and 52.3% in June 2016).

The incoming rotation group had a less positive influence on employment in Queensland than the group it replaced last month, particularly full-time employment. The influence on employment in other States and Territories was similar to the group it replaced.


OUTGOING ROTATION GROUP

In looking ahead to the July 2016 estimates, when the outgoing rotation group rotated into sample 8 months ago, its influence on employment was markedly higher than was previously observed for this rotation group. The differences in employment influence are more pronounced in New South Wales and Victoria than other states. If the influence of this group reverts back to a level more consistent with previous levels, it may lead to a decrease in employment. However, it should be noted that a rotation group’s relative influence can also change due to changes in the composition of the other rotation groups.

The outgoing rotation group in June 2016 had a higher employment to population ratio (62.1% in June 2016) compared to the sample as a whole (61.2% in June 2016).

In original terms, the unemployment rate for the outgoing rotation group in June 2016 was 4.5%, which was lower than the 5.6% for the whole sample. The participation rate for the outgoing rotation group in June 2016 was 65.0%, slightly higher than the 64.8% for the whole sample.


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.