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Labour Force, Australia

Headline estimates of employment, unemployment, underemployment, participation and hours worked from the monthly Labour Force Survey

Reference period
April 2020
Released
14/05/2020
Future releases
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    Next Release 16/07/2020
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    Next Release 13/08/2020
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    Next Release 17/09/2020
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Key statistics

Seasonally adjusted estimates for April 2020:

  • Unemployment rate increased to 6.2%.
  • Participation rate decreased to 63.5%.
  • Employment decreased to 12,418,700.
  • Employment to population ratio decreased to 59.6%.
  • Underemployment rate increased to 13.7%.
  • Monthly hours worked decreased to 1,626 million hours.
Mar 20Apr 20Monthly changeYearly change
Seasonally adjusted
Employed people13,013,00012,418,700-594,300-3.1%
Unemployed people718,800823,300104,50016.7%
Unemployment rate5.2%6.2%1.0 pts1.0 pts
Underemployment rate8.8%13.7%4.9 pts5.2 pts
Participation rate66.0%63.5%-2.4 pts-2.3 pts
Monthly hours worked in all jobs1,790 million1,626 million-164 million-8.0%

Estimates of changes are calculated using un-rounded level estimates, and may be different from, but are more accurate than, movements obtained from the rounded level estimates.

COVID-19 impacts and changes

Major impacts on the labour market

From 22 March 2020, Australia saw the progressive introduction of major social distancing and other business-related restrictions to slow the spread of COVID-19. Also, government support packages were announced, including changes to the mutual obligations of the JobSeeker program (announced on 24 March), and the temporary suspension of the requirement for people to actively look for work, and the JobKeeper wage subsidy (announced on 30 March).

Given the Labour Force Survey reference periods (that is, the weeks the data relates to) fall at the start of each month, the March and April estimates reflect this period of significant change in the labour market. The large month-to-month movements in April reflect a combination of the effects of the restrictions and also the effects of government, business and individual responses.

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In addition to the standard commentary, the ABS has included an expanded suite of articles in to assist in the interpretation of the major changes in key labour market indicators in April.

Suspension of trend series and changes to seasonal adjustment

Time series and sudden changes in the labour market

Trend and seasonally adjusted Labour Force Survey estimates are important for understanding the current state of the labour market, and providing medium and long-term signals.

However, unusual, sudden and/or extreme changes in the labour market (e.g. changes to regular and seasonal patterns in employment, working hours, job search or availability as a result of COVID-19) can be difficult to account for in the short-term in both seasonal adjustment and trend estimation processes.

Suspension of trend estimates

The Labour Force trend series have been suspended from April 2020, until more certainty emerges in the underlying trend in labour market activity over the COVID-19 period. This is in recognition of the time series shocks in the labour market between the March 2020 and April 2020 data points. While trend estimates are generally the best measure of the underlying behaviour of the labour market, any large changes in the labour market as a result of COVID-19 will likely make it difficult to estimate a reliable short-term indicator of the trend.

Existing spreadsheets containing trend, seasonally adjusted and original data will continue to be published in the same format, however trend columns will be populated with ‘nca’.

For the NT and ACT, seasonally adjusted data will be published in separate spreadsheets for the duration of time that the trend series are suspended.

Changes in the seasonal adjustment process

During the COVID-19 period the ABS will use forward seasonal factors to produce seasonally adjusted estimates, rather than the standard concurrent seasonal factors method. The forward factors approach is better suited to managing large movements at the end point of series and will ensure that large movements do not have a disproportionate influence on the seasonal factors.

For a more detailed discussion on the implications of unusual events on time series, see When it's not "business-as-usual": Implications for ABS Time Series.

Future changes

Once further data are available, trend and/or seasonal breaks may be estimated and applied to improve published labour force time series estimates.

The ABS will also provide regular updates on the status of trend and seasonally adjusted estimates, with a view to returning to concurrent seasonal factors at the most appropriate point.

Net Overseas Migration revisions in LFS benchmarks

To ensure the ongoing production of fit for purpose official statistics through the COVID-19 pandemic, the ABS has been assessing the likely impact of changed traveller behaviour on preliminary Net Overseas Migration (NOM) estimates. These NOM estimates feed into Australia's official population estimates and, in turn, the Labour Force Survey (LFS) benchmarks.

The ABS uses the '12/16 month rule' when measuring NOM, with estimates first published as preliminary, and then revised after 12 months. To estimate preliminary NOM, a propensity model is used based on the likelihood a traveller will remain in Australia for the next 12 out of 16 months. After 16 months, when the outcome is known, NOM can be finalised (reflected as revisions within the Estimated Resident Population (ERP)).

Historically, the model which underpins preliminary NOM performs well and these revisions are generally small. This model draws on the behaviour of travellers with similar characteristics from 12 month previously, which is usually a strong predictor of the outcomes of those arriving in the same month of the following year. The same process applies to departures.

However, due to the disruptions caused by COVID-19, the relationship between traveller behaviour in 2020 and that of 12 months ago is unlikely to hold, potentially leading to larger revisions. As a result, preliminary NOM data will now be revised every quarter, instead of the current approach of revising once after four quarters.

These more frequent revisions will ensure the most timely and accurate data are fed into ERP, and into LFS benchmarks.

This new approach to revisions will be implemented into:

  • NOM and ERP in respect of the December quarter 2019 – due for release in Australian Demographic Statistics on 18 June 2020; and
  • labour force estimates (as part of the quarterly rebenchmarking process) in respect of May 2020 onwards – due for release in Labour Force, Australia on 18 June 2020.

This quarterly approach to NOM revisions will be reviewed after four quarters.

Labour Force Survey response

Labour Force Survey response remained high in April, with the small decline in response of less than 1,000 households largely concentrated within the incoming rotation group. Given the decrease in that group, the ABS made the decision to reduce the influence of the incoming rotation group this month, an approach last used for an incoming rotation group in Queensland, in September 2016. For more information, please refer to Rotation group analysis.

Treatment of people on JobKeeper, JobSeeker or stood down

People paid through the JobKeeper wage subsidy, in receipt of JobSeeker payments, or stood down by their employer are classified as follows in the Labour Force Survey. This approach:

  • is consistent with the long-standing concepts and practices used in the Labour Force Survey; and
  • has not resulted in any changes to the Labour Force Survey questionnaire.

The ABS will update this information if new scenarios emerge or the conditions of existing scenarios change over the course of the COVID-19 pandemic.

1. People paid through the JobKeeper wage subsidy: employed

The ABS expects that people who are paid through the JobKeeper scheme will answer the questions in a way that results in them being classified as employed, regardless of the hours they work (e.g. even if they are stood down). People paid through JobKeeper may work less hours, the same hours, or more hours, than usual.

Under the JobKeeper program, eligible businesses and not-for-profit organisations affected by COVID-19 can elect to receive a subsidy to support their employment of eligible employees. Some self-employed people are also eligible to receive the JobKeeper payment.

Employers will pay these employees a wage, within their existing employment relationship, supporting an ongoing attachment to a job.

People stood down without pay from late March through to early May were away from their job for four weeks or more and therefore were no longer considered employed in May. This explains part of the further fall in employment in May.

2. People in receipt of the JobSeeker payment: it depends on their labour market activity

People who receive the JobSeeker or other similar government payments are not automatically classified as unemployed (just as those classified as unemployed will not necessarily be in receipt of a government payment) and how they are categorised depends on how they answer questions around labour market activity.

The JobSeeker payment is paid to people who are looking for work or are sick or injured and cannot undertake their usual work or study for a short time, and who meet the eligibility requirements. People can also receive the JobSeeker payment if they have a job, if they meet a low income test.

Recent changes to the JobSeeker program related to COVID-19 also meant that recipients did not have to meet the usual mutual obligation requirements, such as looking for work. Some of these obligations are gradually being reinstated from June onwards, and changes may lead to increases in active job search and an increase in the number of people classified as unemployed in future months.

To be classified as unemployed in Labour Force statistics, a person must:

  • have actively looked for full-time or part-time work in the last four weeks; and
  • be available for work in the reference week.

People who were waiting to start a new job within four weeks from the end of the reference week and could have started in the reference week if the job had been available then are also classified as unemployed.

3. People not working any hours, including those who were stood down: it depends on their job attachment and pay, and potentially other labour market activity

A person will be classified as employed if they:

  • had taken any kind of paid leave;
  • were away from their job for any reason (e.g. they were stood down), and were paid for some part of the previous 4 weeks (which could include wages subsidised through the JobKeeper scheme); or
  • were away from their job for four weeks or less for any reason, without pay, but believe they still have a job to go back to (e.g. they were stood down, with no pay).

If a person is away from their job for four weeks or more without pay, or they believe they no longer have a job to be absent from, they will be classified as:

  • unemployed - if they have actively looked for work, and are available to start work; or
  • not in the labour force - if they have not looked for work and/or are not available to start work.

There will be a range of ways in which people will have been stood down without work as a result of COVID-19. Some may be stood down with pay, some through paid leave (e.g. long service leave, annual leave, etc) and some without pay. Some people will perceive that they still have a job (but just no hours at the moment), while others will consider they have lost their job. 

These differences are effectively captured using Labour Force Survey questions, which support the ABS to effectively categorise people and produce key measures of the labour market.

For further information, please email labour.statistics@abs.gov.au.

Unemployment

In seasonally adjusted terms, in April 2020:

  • the unemployment rate increased by 1.0 pts to 6.2% (1.0 pts higher than a year ago)
  • unemployed people increased by 104,500 to 823,300 (and increased by 117,700 over the year to April 2020)
  • the youth unemployment rate increased by 2.2 pts to 13.8% (and increased 1.9 pts over the year to April 2020)
Download

Employment

In seasonally adjusted terms, in April 2020:

  • employment decreased by 594,300 (-4.6%) to 12,418,700 people
  • over the year to April 2020, employment decreased by 3.1% or 395,100 people

Underpinning these net changes in employment is extensive change which occurs in the labour market. In recent months there has generally been considerably more than 300,000 people entering employment, and more than 300,000 leaving employment each month. There are also changes in the hours that people work, which can have an impact on the full-time and part-time composition of employment.

Download

Full-time and part-time employment

In seasonally adjusted terms, in April 2020:

  • full-time employment decreased by 220,500 to 8,656,900 people, and part-time employment decreased 373,800 to 3,761,800 people
  • over the year to April 2020, full-time employment decreased by 123,000 people and part-time employment decreased by 272,000 people

This change led to a decrease in the part-time share of employment over the past 12 months, from 31.5% to 30.3%.

Employment to population ratio

In seasonally adjusted terms, in April 2020:

  • the employment to population ratio decreased by 2.9 pts to 59.6%, and decreased by 2.8 pts from the same time last year

The employment to population ratio provides a measure of the change in employment relative to changes in the size of the population.

Download

Hours worked

In seasonally adjusted terms, in April 2020, monthly hours worked in all jobs:

  • decreased by 163.9 million hours (-9.2%) to 1,625.8 million hours 
  • decreased by 8% over the year, which is higher than the 3.1% decrease in employed people
Download

Participation

In seasonally adjusted terms, in April 2020, the participation rate:

  • decreased by 2.4 pts to 63.5%, and decreased 2.3 pts over the year to April 2020
  • decreased by 1.9 pts for men (68.9%) and decreased by 2.9 pts for women (58.4%)
  • decreased by 2.7 pts to 76.0% for 15 to 64 year olds (the working age population). For 15 to 64 year old men, it was 81.1% and for 15 to 64 year old women it was 71.0%
  • decreased 5.6 pts to 62.9% for 15 to 24 year olds
Download

Underemployment

In seasonally adjusted terms, in April 2020:

  • the underemployment rate increased by 4.9 pts to 13.7% (5.2 pts higher than a year ago)
  • the underutilisation rate increased 5.9 pts to 19.9%
Download

States and territories

April 2020, Seasonally adjusted estimates
New South WalesVictoriaQueenslandSouth AustraliaWestern AustraliaTasmaniaNorthern TerritoryAustralian Capital TerritoryAustralia
Employed persons3,916,2003,327,2002,432,400818,7001,307,900249,300131,100231,10012,418,700
Employed persons - monthly change-5.4%-3.7%-5.1%-4.8%-4.6%-3.4%-3.2%-4.0%-4.6%
Employment to population ratio58.9%60.6%58.6%56.1%61.3%56.1%70.0%67.2%59.6%
Employment to population ratio - monthly change-3.4 pts-2.4 pts-3.2 pts-2.8 pts-3.0 pts-2.0 pts-2.4 pts-2.8 pts-2.9 pts
Unemployment rate6.0%6.0%6.8%7.2%6.0%6.2%6.5%4.0%6.2%
Unemployment rate - monthly change1.1 pts0.8 pts1.2 pts0.9 pts0.6 pts1.3 pts1.2 pts0.6 pts1.0 pts
Underemployment rate13.2%14.1%13.1%15.7%14.6%16.8%10.6%9.0%13.7%
Underemployment rate - monthly change4.6 pts5.7 pts4.0 pts5.2 pts4.9 pts4.7 pts4.7 pts3.5 pts4.9 pts
Participation rate62.6%64.5%62.9%60.4%65.2%59.8%74.8%70.0%63.5%
Participation rate - monthly change-2.8 pts-2.0 pts-2.6 pts-2.5 pts-2.8 pts-1.3 pts-1.5 pts-2.5 pts-2.4 pts

Rotation group analysis

Sample composition and rotation

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

The sample comprises three components:

  • the matched common sample (people who responded in both the current month and previous month)
  • the unmatched common sample (people who responded in the current month but who did not respond in the previous month, or vice versa)
  • the incoming rotation group (replacing people who rotated out)

The matched common sample describes the change observed for the same respondents in the current and previous month, 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 they reflect different households and people. The design of the survey, including the weighting and estimation processes, ensures that these differences are generally relatively minor and do not affect the representativeness of the survey estimates. Monthly estimates are designed to be representative, regardless of the relative contribution of the three components of the sample.

The contributions of the three sample components to the original estimates of employed, unemployed and not in the labour force are in the spreadsheet 'Contribution from sample components to estimates' below.

COVID-19 and the incoming rotation group in April

The ABS has been actively managing the potential risks from COVID-19 for data collection. Face-to-face interviews were suspended in the third survey collection week in March and no face-to-face interviews were conducted in April. Prior to COVID-19, around 90% of responses to the Labour Force Survey were provided through telephone interviews or online, leaving around 10% involving face-to-face interviews.

During March and April, the ABS implemented additional initiatives to support households responding by telephone or online. Nevertheless, with the suspending of face-to-face interviews, there was a small fall in response between March and April (a fall of less than 1,000 fully responding households). Around 600 of this fall was in the incoming rotation group in the sample, with the common sample (the other seven rotation groups) relatively unchanged.

Given the fall in response in the incoming rotation group, the ABS decided to reduce the influence of the incoming rotation group, as part of the standard survey estimation methods. This followed an approach last used for an incoming rotation group in Queensland, in September 2016. The ABS will undertake further analysis of the April incoming rotation group and its responses for April and May, and also undertake analysis of the May incoming rotation group, to determine whether any additional estimation enhancements are needed for these groups, to be implemented in the May 2020 Labour Force release.

In the meantime, users of the GM1 data cube should exercise caution in interpreting incoming and outgoing rotation group changes. The ABS recommends using common sample share analysis for March-April in making comparisons with data for previous periods.

Outgoing rotation group

The outgoing rotation group in April 2020, that will be replaced by a new incoming rotation group in May 2020, had:

  • the same employment to population ratio in April 2020 (59.7%) as the sample as a whole
  • a higher full-time employment to population ratio in April 2020 (41.6%) than the sample as a whole (41.4%)
  • a lower unemployment rate in April 2020 (5.9%) than the sample as a whole (6.3%)
  • a lower participation rate in April 2020 (63.4%) than the sample as a whole (63.7%)

The importance of seasonally adjusted data

The gross flows and rotation group data are in original terms only, and are included to provide additional information on the month-to-month movements. They have a considerable level of inherent sampling variability, which is specifically adjusted for in the seasonally adjusted series.

Contribution from sample components to estimates

Data downloads

Labour Force status

Data files

Hours worked

Data files

Underemployment and underutilisation

Data files

Flows into and out of employment

GM1 - Labour force status and Gross changes (flows) by Age, Sex, State and Territory, February 1991 onwards

All time series spreadsheets

All time series spreadsheets

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