Friday 17 September 2010

Is unemployment in Cairns really falling, or a case of premature jubilation?

Regional unemployment data just released shows headline unemployment rate numbers for Far North Queensland with a brighter trend and heading down from 10.3% to 7.9%.

However, it may just be a dose of premature jubilation.

So let's not get too excited. This downward trend can be attributed to the participation rate - that's the percentage employed or actively seeking work - went the other way and fell from 71% to 67.9% in a month.

Therefore the ABS estimate of the total number employed in the Far North also actually fell by 2,000. It's simply statistically too volatile and several spreadsheet cells in the female/male subsets tagged "estimate is subject to sampling variability too high for most practical purposes". Although it's not unusual for such a tag to appear, but more than recently usual?

These movements are also reflected in the more statistically reliable Queensland data last week with the State unemployment falling below 5%, despite the ABS estimate of 30,000 fewer employed than the previous month and participation also down.

Russell Beer from Advance Cairns told the Cairns Post it was the first time he had full confidence in the official figures.

“7.9% is great, that’s pleasing, I wasn’t expecting it below 8 per cent,” Beer said. “I think we are seeing the economy picking up.”

However, as property forecast expert Rick Carr says even though there were fewer people looking for work, the unemployment rate is still on the way down but the figures are "wobbling all over the place.”

The good news is, this month's estimate of the total number employed in Queensland is actually the lowest since March, and the total number employed for Far North Queensland is the lowest since February.

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