Labour Force, Australia

• Employment increased by 20,000 to 12,996,700 people. Full-time employment increased by 14,600 to 8,879,300 people and part-time employment increased by 5,400 to 4,117,300 people.
• Unemployment increased by 600 to 709,600 people.
• Unemployment rate remained steady at 5.2%.
• Participation rate remained steady at 66.0%.
• Monthly hours worked in all jobs increased by 0.9 million hours to 1,785.5 million hours.
   

• Employment increased by 13,500 to 12,995,400 people. Full-time employment increased by 46,200 to 8,882,200 people and part-time employment decreased by 32,700 to 4,113,300 people.
• Unemployment increased by 31,000 to 725,900 people.
• Unemployment rate increased by 0.2 pts to 5.3%.
• Participation rate increased by 0.1 pts to 66.1%.
• Monthly hours worked in all jobs decreased by 8.1 million hours to 1,781.8 million hours.
   

• The monthly trend underemployment rate remained steady at 8.5%. The monthly underutilisation rate remained steady at 13.7%.
• The monthly seasonally adjusted underemployment rate increased by 0.3 pts to 8.6%. The monthly underutilisation rate increased by 0.5 pts to 13.9%.
   

Australia's trend estimate of employment increased by 20,000 people in January 2020, with:

• the number of unemployed people increasing by 600 people;
• the unemployment rate remained steady at 5.2%;
• the underemployment rate remaining steady at 8.5%;
• the underutilisation rate remained steady at 13.7%;
• the participation rate remaining steady at 66.0%; and
• the employment to population ratio remaining steady at 62.6%.
   

Over the past year, trend employment increased by 257,400 people (or 2.0%), which was the same as the average annual growth rate over the past 20 years of 2.0%. Over the same 12 months, the trend employment to population ratio, which is a measure of how employed the population (aged 15 years and over) is, increased by 0.3 percentage points (pts) to 62.6%.

Trend employment increased by 20,000 people (0.15%) between December 2019 and January 2020. This was below the monthly average growth rate over the past 20 years of 0.16%.

Underpinning these net changes in employment is extensive dynamic change, which occurs each month in the labour market. In recent months there has been more than 300,000 people entering and leaving employment. There is also further dynamic change in the hours that people work, which results in changes in the full-time and part-time composition of employment.

Trend full-time employment increased by 14,600 people between December 2019 and January 2020, and part-time employment increased by 5,400 people. Compared to a year ago, there were 146,100 more people employed full-time and 111,200 more people employed part-time. This compositional change has led to an increase in the part-time share of employment from 31.4% to 31.7%.

The trend estimate of monthly hours worked in all jobs increased by 0.9 million hours (0.0%) to 1,785.5 million hours in January 2020. Over the past year, monthly hours worked in all jobs increased by 1.3%, below the 2.0% increase in employed people. In January 2020, the average hours worked per employed person was around 137.4 hours per month or around 31.6 hours per week.

The trend unemployment rate remained steady at 5.2%, after December 2019 was revised from 5.1% to 5.2%. The number of unemployed people increased by 600 in January 2020 to 709,600 people, and by 34,400 people since January 2019.

The trend participation rate remained steady at 66.0% in January 2020, and was 0.4 pts higher than in January 2019. The female participation rate increased 0.1pt to 61.4% and the male participation rate remained steady at 70.9%.

The labour force includes the total number of employed and unemployed people. Over the past 12 months, the labour force increased by 291,800 people (2.2%), which was above the rate of increase for the total Civilian Population aged 15 years and over (1.6%).

The trend participation rate for 15-64 year olds, which controls (in part) for the effects of an aging population, increased by 0.1 pts to 78.8%. The gap between male and female participation rates in this age group was less than 10 pts, at 83.1% and 74.5% respectively, continuing the long term convergence of male and female participation.

The trend participation rate for 15-24 year olds (who are often referred to as the "youth" group in the labour market) increased by 0.1 pts to 68.4%. The unemployment rate for this group increased 0.1 pts to 11.9% in January 2020, and increased by 0.5 pts since January 2019.

The trend series smooths the more volatile seasonally adjusted estimates and provide the best measure of the underlying behaviour of the labour market.

Seasonally adjusted employment increased by 13,500 people in January 2020 to 12,995,400 people. The underlying composition of the net change was an increase of 46,200 people in full-time employment and a decrease of 32,700 people in part-time employment. Since January 2019, full-time employment increased by 143,900 people, while part-time employment increased by 103,500 people.

Seasonally adjusted monthly hours worked in all jobs decreased by 8.1 million hours (or 0.4%) in January 2020 to 1,781.8 million hours.

The seasonally adjusted employment to population ratio remained steady at 62.6% in January 2020, and increased by 0.2 pts since January 2019.

The seasonally adjusted unemployment rate increased by 0.2 pts to 5.3% in January 2020. The participation rate increased by 0.1 pts to 66.1%.

In January 2020, increases in employment were observed in most states and territories, notably Victoria (up 7,300 people), Queensland (up 4,700 people) and New South Wales (up 4,600 people). The only decrease was recorded in South Australia (down 900 people).

Over the past year, increases in employment were observed in all states and territories. The largest increases were in Victoria (up 94,600 people), New South Wales (up 65,300 people), and Queensland (up 57,100 people). The highest annual employment growth rates were in the Australian Capital Territory at 3.6%, followed by Tasmania at 3.5% and Victoria at 2.8%. The annual trend employment growth rates in Victoria, Tasmania and the Australian Capital Territory were above their respective 20 year average annual growth rates in trend employment.

The monthly trend unemployment rate increased by 0.1 pts in the Victoria (5.0%). The monthly trend unemployment rate decreased by 0.1 pts in South Australia (5.9%) and Tasmania (5.8%).

The monthly trend participation rate increased by 0.3 pts in the Northern Territory (75.1%), and by 0.1 pts in Victoria (66.7%) and Tasmania (61.2%). The monthly trend participation rate decreased by 0.2 pts in the South Australia (62.4%) and 0.1 pts in the Australian Capital Territory (70.6%).

In January 2020, the largest increases in employment were recorded in Western Australia (up 6,700 people), Victoria (up 2,900 people) and Queensland (up 2,800 people). The largest decrease was in New South Wales (down 1,500 people).

The seasonally adjusted unemployment rate increased by 0.6 pts in Queensland (6.3%), 0.4 pts in both Victoria (5.4%) and Tasmania (5.9%). The seasonally adjusted unemployment rate decreased in South Australia (down 0.5 pts to 5.7%).

The seasonally adjusted participation rate increased by 0.5 pts in Western Australia (68.2%) and by 0.4 pts in Queensland (66.0%). The seasonally adjusted participation rate decreased by 0.4 pts in South Australia (62.1%), and by 0.1 pts in New South Wales (65.4%).

Seasonally adjusted estimates are not published for the two territories.

Bushfires resulted in disruption to ABS data collection operations in some regions in New South Wales and Victoria during January 2020.

In New South Wales, some areas within the 'Capital Region', the 'Southern Highlands and Shoalhaven' region and the 'Mid North Coast' region could not be included in the survey for January, accounting for around 3.3% of the total sample in the state. In Victoria, some areas within the 'Latrobe - Gippsland' region were also unable to be surveyed, accounting for around 0.8% of the Victorian sample. As a result, there was slightly higher than usual survey non-response in these areas.

The Labour Force Survey has a robust survey design, with a large sample, a high level of response, and sophisticated weighting and estimation methods. Given the scale of the bushfires, the ABS undertook additional quality assurance of January data, to ascertain whether any additional statistical methods were required to minimise the effect of a higher level of non-response on key headline Labour Force statistics.

The ABS confirmed that the disruption from the bushfires did not have a notable impact on key headline statistics and that no additional statistical interventions were required. A range of estimates were produced, as part of the additional quality assurance undertaken, including using imputation to account for the higher level of non-response. These estimates were highly consistent with the published estimates in this release. For example, the trend and seasonally adjusted unemployment rates for Australia, New South Wales and Victoria were the same (to 1 decimal place), as were the size of the movements in these unemployment rates between December 2019 and January 2020.

While no notable impact was observed, it is important to note that changes in Labour Force statistics between December 2019 and January 2020 (particularly changes in hours worked) may still be slightly understated or overstated, relative to what would have been observed if the ABS had been able to collect information from the entire sample. The ABS will undertake further analysis of January 2020 data when February 2020 data has been collected.

Some region level data for New South Wales and Victoria for January 2020 will not be published in Labour Force, Australia, Detailed - Electronic Delivery (cat. no. 6291.0.55.001) on the 27th February. The ABS expects to resume publishing these estimates with either the release of February 2020 data (in March) or March 2020 data (in April).

The estimates in this publication are based on a sample survey. Published estimates and movements are subject to sampling variability. Standard errors give a measure of sampling variability. The interval bounded by two standard errors is the 95% confidence interval, which provides a way of looking at the variability inherent in estimates. There is a 95% chance that the true value of the estimate lies within that interval.

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

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 December and January, 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.

In original terms, the incoming rotation group in January 2020 had a lower employment to population ratio than the group it replaced (62.0% in January 2020, compared to 64.2% in December 2019), and was higher than the sample as a whole (61.8%). The incoming rotation group had a lower full-time employment to population ratio than the group it replaced (43.2% in January 2020, compared to 44.5% in December 2019), and was higher than the sample as a whole (42.7%).

The incoming rotation group had a higher unemployment rate than the group it replaced (5.8% in January 2020, compared to 4.0% in December 2019), and was higher than the sample as a whole (5.7%). The incoming rotation group had a lower participation rate than the group it replaced (65.8% in January 2020, compared to 66.9% in December 2019), and was higher than the sample as a whole (65.6%).

In looking ahead to the February 2020 estimates, in original terms, the outgoing rotation group in January 2020, that will be replaced by a new incoming rotation group in February 2020, had an employment to population ratio in January 2020 of (61.8%). the same as the sample as a whole (61.8%). The outgoing rotation group in January 2020 had a higher full-time employment to population ratio (43.4%) than the sample as a whole (42.7%).

The outgoing rotation group in January 2020 had a lower unemployment rate (5.3%) compared to the sample as a whole (5.7%). The outgoing rotation group in January 2020 had a lower participation rate (65.2%) compared to the sample as a whole (65.6%).

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 provides the best measure of the underlying behaviour of the labour market and is the focus of the commentary in this publication.

In addition to analysis across the entire sample, the ABS also undertakes similar analysis for the responding sample in each state and territory each month, and highlights where there is a notable change for users to be aware of. For example, in January 2020, the incoming rotation group in Victoria was less employed and more likely to be not in the labour force than the group it replaced, and was generally less employed and more not in the labour force than the matched sample. As with any notable month-to-month movement of this nature in state and territory estimates, the ABS recommends exercising a degree of caution in interpreting short-term changes.

As for its reporting for the entire sample, where the ABS has not highlighted a notable incoming rotation group effect, any larger changes should therefore be considered to reflect a broader change across the sample.

This section provides an archive of articles and analysis published in Labour Force, Australia (cat. no. 6202.0) and Labour Force, Australia, Detailed - Electronic Delivery (cat. no. 6291.0.55.001) and Labour Force, Australia, Detailed, Quarterly (cat. no. 6291.0.55.003), promoting the effective use of labour force statistics. Articles are sorted by publication month.

Articles on labour related topics are also available in Australian Labour Market Statistics (cat. no. 6105.0) and Australian Social Trends (cat. no. 4102.0).

For further information about these and related statistics, email client.services@abs.gov.au or contact the National Information and Referral Service on 1300 135 070.