I remember one of the old hands in the Queensland Government Statistician’s Office telling me back around 2000 that they once queried the ABS about the reliability of labour force data for Queensland, and were told the main point of the Labour Force Survey is to produce a reliable national unemployment rate estimate, which is essential for the RBA in setting monetary policy. In other words, you should be grateful you’re getting any State data at all. So there have always been doubts about the reliability of labour force data at the State level, and this appears to be the reason Queensland Treasury has consistently used trend estimates in its briefings, even though the seasonally adjusted data are much more likely to identify turning points in the labour market.
Given the concerns about the State-level labour force data, I’ve always been super skeptical about the reliability of data at the regional level, and recent batches of regional data have confirmed that skepticism. Loose Change in a post earlier today (Employment breakdowns) points out the wacky labour force data for North Queensland we’ve seen recently. These numbers are so wacky that I’m starting to worry about the quality of the administration of the Labour Force Survey in North Queensland. I would encourage the ABS to undertake an urgent review of these data to establish whether the extreme volatility is due to (a) sampling error associated with the small sample size in the region or (b) failure to consistently obtain representative samples of households in this region.