Background Notes

Purpose

The purpose of this release is to provide a detailed series of monthly unemployment estimates. The release contains both monthly unemployment rates and monthly unemployment volumes.

Calculation of Monthly Estimates

The Labour Force Survey (LFS) provides benchmark estimates of employment and unemployment for each quarter since the beginning of 1998. These quarterly benchmark estimates are then used to compile monthly data using the Proportional Denton method. The main characteristic of this method is that the monthly Live Register series is used as an indicator to disaggregate the quarterly LFS unemployment series into a monthly series in such a way as to minimise the differences between two consecutive months. It also ensures that the average of three months in a particular calendar quarter is equal to the corresponding LFS estimate.

For months where the quarterly unemployment data is not yet available, the ratio of the LFS monthly estimate to the Live Register monthly estimate (i.e. the benchmark to indicator ratio) is forecast forward in order to extrapolate a monthly LFS estimate. The monthly series is revised each quarter when the latest quarterly data becomes available. This approach adheres to agreed international practice.

Seasonal Adjustment

To correct for typical seasonal patterns, the data series included have been concurrently seasonally adjusted. This seasonal adjustment is completed by applying the X-12-ARIMA model, developed by the U.S. Census Bureau. In the case of these monthly unemployment estimates, seasonal adjustment is conducted using the indirect approach, where each individual series is independently adjusted. To preserve consistency between the individual and aggregate series, the series for gender, age group and total monthly unemployed are then created from these component series. The series for monthly unemployment rates are likewise created from these component series.

Additional Background Information

Further information regarding the LFS and Live Register series are available from each respective release, while specific information regarding the new LFS and the impact of the revisions arising from the Census of Population 2016 is available in an additional information note.

Labour Force Survey Q4 2017