Methods for forecasting macroeconomic indicators 宏观经济预测

StyleRef“Heading1NoNum”

Methodforgeneratingforecastsofmacroeconomicindicators

Page

1

OFFICIAL

Methodforgeneratingforecastsofmacroeconomicindicators

MacroeconomicStrategy,EconomicGroup,DepartmentofTreasuryandFinance

May2025

TheDepartmentofTreasuryandFinance(DTF)monitorseconomicconditionsintheVictorianeconomyandpreparesforecastsofthemaineconomicindicatorsofthoseconditionsforthebudgetyearandthreeensuingyears.TheeconomicforecastsunderpintheGovernment'sfiscaloutlookpresentedintheBudgetandBudgetUpdate.

Thekeyeconomicindicatorsareforecastgrowthinrealgrossstateproduct(GSP)andthelevelofnominalGSP,growthinemployment,theunemploymentrate,growthinwages(asmeasuredbytheWagePriceIndex,orWPI),growthinconsumerprices(asmeasuredbytheMelbourneConsumerPriceIndex,orCPI)andpopulationgrowth.

TheaimofthispaperistohelpthereaderunderstandthemethodsusedbyDTFtoundertakemacroeconomicforecasts.

Approach

Anumberofmethodsandsourcesofinformationareemployedtogeneratemacroeconomicforecasts.Theseincludeconsiderationofrecentandcurrentrecordedvalues,governmentandcentralbankpolicyannouncements,econometricmodelling,trendssuggestedbyleadingindicators,economictheory,industryandbusinessliaison,insightsprovidedbyotherforecasts,andtheexperienceandjudgementofDTFanalysts.

Theforecastingprocessisiterative.Manyofthevariablesinmodelequationsarecommontoseveralmodels,anddependentvariablesinonemodelmaybeexplanatoryvariablesinothers,requiringseveralroundstoensureconvergence.Intheprocessothersourcesofexternalinformationandthejudgementandexperienceoftheforecastersareused.

Thereisapointinrecenthistorywhereactualsforeachofthevariablestobeforecastareknown(notwithstandingthattheAustralianBureauofStatistics(ABS)oftenrevisespublisheddata).Thisinformationprovidesthestartingpointfortheforecasts.

Theforecastsbytheendoftheforwardestimatesareanchoredbylong-runsteady-stateortrendvalues.Thesetrendvaluesarederivedfromeconomictheoryandbasedonfundamentaldrivers.Fundamentaldriversofnominalgrowthincludepopulation,productivity,workforceparticipationandinflation.

Themethodologyisreviewedbeforeeachforecastingroundwithnewparametersinmodelequationscalculatedfromupdateddata,ornewmodelspecificationsareused.Fromtimetotimemoreextensivereviewsoftheforecastingprocessareundertaken.

ThefollowingsectionsdescribethemethodsusedtoforecasteachofthemaincomponentsofGSP,thelabourmarket,inflation,wagesgrowthandpopulation.Sourcesofdatathatareusedtoconstructthemodels,andadjustforcontemporaneousandotherinfluences,arealsoprovided.

Grossstateproduct

RealGSPisthesumofitsexpenditurecomponents:householdconsumption,dwellinginvestmentandownershiptransfercosts,businessinvestment,governmentexpenditure,netinternationaltradeandthebalancingitem.EachofthecomponentsisforecastseparatelyandaggregatedtoformaforecastofrealGSP.

ThetrendvalueofrealGSPisprojectedusingestimatesofthekeylong-rundriversofeconomicgrowth:population,workforceparticipationThistermisdefinedastheproductofthelabourforceparticipationrateoftheworking-agepopulation,theemploymentrateofthelabourforce,andaverageworkinghoursperemployedworker,anditisconceptuallyequivalenttooveralllabourutilisationintheeconomy.

andproductivity.

TheframeworkalsoemploysameasureofgrowthinthepricedeflatorforGSP.This,withthemostrecentactualvaluepublishedbytheABS,enablesthegenerationofforecastsofnominalGSP.TheGSPdeflatorforecastsareinformedbyforecastmovementsintheCPI.

Householdconsumption

Definition

Householdfinalconsumptionexpenditure(consumption)consistsoftheexpenditurebyhouseholds,includingimputedexpenditure,incurredbyconsuminggoodsandservices.

Method

Consumptionforecastsarebasedprimarilyoneconometricrelationshipswithkeydrivers,augmentedbyconsiderationofrecentperformanceofindicators.

Thelongrunequilibriumlevelofrealconsumptionisdeterminedbyassumptionsaboutpopulationgrowth,labourincome(totalrealcompensationofemployees),realnetworthandthemortgagerate.Intheshortrun,aregressionmodelisusedtoforecastconsumption,andincludesretailsalesandconsumersentiment.

Householdspendingispositivelyrelatedtolabourincome:allelseequal,householdswillspendashareoftheirincome,sogrowthinincomeleadstogreaterexpenditure.Increasesinhouseholdnetwortharealsolinkedwithincreasedconsumptionforagivenlevelofincome.

Householdspendingisinverselyrelatedtothemortgagerate.Lowermortgageratesimplylowerinterestrepaymentsonloans,increasingdisposableincomeandboostingexpenditure.

Theconsumptionforecastsaregenerated,thenadjustedbasedonadditionalinformationincludingdataonretailtrade,monthlyspendingbasedontheABS’experimentalMonthlyHouseholdSpendingIndicator,consumersentiment,householdsavingsbehaviour,thecompositionofrecentconsumptionspending(e.g.ondiscretionaryandnondiscretionarygoodsandservices),andgovernmentpolicyannouncements.

Datasources

HistoricalestimatedresidentpopulationdataissourcedfromtheABS,AustralianDemographicStatistics(catalogue3101.0).ForecastERPissourcedfrompopulationforecastsproducedbytheMacroeconomicStrategyteam.

HistoricalrealhouseholdconsumptionisthechainvolumemeasureofVictorianhouseholdfinalconsumptionexpenditureobtainablefromABS,AustralianNationalAccounts.

Totalcompensationofemployeesistheonlysourceofhouseholdincomeavailableonaquarterlybasisatthestatelevel.DataaresourcedfromABS,AustralianNationalAccounts.Totalcompensationofemployeesisprojectedusingthewagepriceindexandemploymentforecasts(seebelow).

RealVictoriancompensationofemployeesiscalculatedasVictoriancompensationofemployeesdividedbytheVictorianimplicitpricedeflator(IPD)forhouseholdconsumption.TheVictorianIPDforhouseholdconsumptionisderivedbydividingVictoriannominalhouseholdconsumptionbyVictorianrealhouseholdconsumption.

AustralianrealhouseholdnetworthiscalculatedasthedifferencebetweenAustralianhouseholdassetslessliabilitiesdividedbytheVictorianimplicitpricedeflatorforhouseholdconsumption.DataontheAustralianhouseholdassetsandliabilitiesaresourcedfromtheReserveBankofAustralia(RBA),HouseholdandBusinessBalanceSheets,TableE1.

ThemortgagerateisthestandardvariableloanratethatAustralianbanksset.DataonthestandardvariableloanrateisobtainablefromtheRBA,IndicatorLendingRates,TableF5.

TheVictorianimplicitpricedeflatorforhouseholdconsumptionisprojectedbasedonconsumerpriceindexforecasts(seebelow).

Privateinvestment

Definitions

Theterm‘privateinvestment’isusedhereasshorthandfortheNationalAccountscategoryofprivategrossfixedcapitalformation.Privateinvestmentcomprisesdwellinginvestment,ownershiptransfercostsandbusinessinvestment.

Dwellinginvestmentandownershiptransfercosts

Definitions

Dwellinginvestmentisthevalueofacquisitionsofnewdwellings,homeimprovements(alterationsandadditions),andconversionsfromnon-dwellingstodwellings(asdefinedbytheABS,AustralianSystemofNationalAccounts:Concepts,SourcesandMethods,2020-21financialyear).

OTCconsistoffeespaidtolawyers;feesandcommissionspaidtorealestateagentsandauctioneers;stampduty;titleofficecharges;andlocalgovernmentcharges(asdefinedbyABS,AustralianSystemofNationalAccounts:Concepts,SourcesandMethods,2020-21financialyear).

Method

Dwellinginvestmentisforecastusinganaverageofseveraleconometricmodels,comprisingerrorcorrectionandsemi-structuralspecifications.

Theerror-correctionmodelsusedemandandsupply-sidefactorssuchasMelbourneestablishedhousepricesanddwellingapprovals.Anincreaseintheresidentialpropertypriceindexisexpectedtoleadtoanincreaseindwellinginvestment.Theintuitionforthisisthatwhenpotentialhousebuildersseethepriceofestablishedhousesrising,theywillbeencouragedtomakeaninvestmentinhousing.Therewillbeimmediateeffects,butdependingonthecharacteristicsofthehouseholds,therewillalsobelaggedeffectstoaccountforthetimetakenforhouseholdstoobtainfinance,getbuildingpermitsapproved,selectbuildersandotherrequirementsbeforethefullimpactofhousepricesstarttoflowthroughtoinvestment.Dwellingapprovalsisaleadingindicatorforsupply,providinganindicationofthelevelofbuildingactivityinthepipeline.Thesemi-structuralmodelusesdwellingapprovalswhichareforecastandthenmappedtodwellinginvestment.

Inthelongrun,dwellinginvestmentislargelydrivenbydemographicfactors.Anincreaseinthepopulationleadstoanincreaseindwellinginvestment,duetotherelatedincreaseindemandforhousing.Afallinaveragehouseholdsizeimpliesanincreaseinthenumberofhouseholdsand,consequently,inthenumberofhouses.

Theownershiptransfercostforecastsarebasedonconsiderationofrecentdata,judgementandeconometricmodelling.Theeconometricmodelisasimplelinearrelationshipbetweenthevolumeofownershiptransfercostsandthevolumeoflandtransferdutytransactions.Anincreaseinlandtransferdutyvolumeswillleadtobothconcurrentandlaggedincreasesinownershiptransfercosts.Thelaggedresponsepossiblyreflectsrealestateagentschargingandreceivingfeessometimeafterapropertytransactionisfinalised.

Datasources

DwellinginvestmentforVictoriaissourcedfromABS,AustralianNationalAccounts.

TheresidentialpropertypriceindexforMelbourneisfromtheCoreLogicHedonicHomeValueIndex.Theuseofahedonicseriesisusefulinovercomingtheissueofcompositionalbiasassociatedwithmedianpriceandrepeatsalesmeasures.

DwellingapprovalsforVictoriaaresourcedfromABS,BuildingApprovals.

OwnershiptransfercostsforVictoriaaresourcedfromABS,AustralianNationalAccounts.Landtransferdutyvolumesaresourcedfromtheinhouselandtransferdutymodelusedfortaxrevenueforecasting.

Businessinvestment

Definition

Businessinvestmentcomprisesfourcomponents:nondwellingconstruction,machineryandequipment,intellectualpropertyproducts,andbiologicalcultivatedresources.

Nondwellingconstructioncontributessignificantlytothevolatilityofbusinessinvestmentandreflectsthelumpynatureofmajorlongtermprojects,whilemachineryandequipmentinvestmentisrelativelyshortterminnatureandcanthereforealsoexhibitsignificantvolatility.Intellectualpropertyproductsexhibitrelativelystablegrowthovertime.

Method

Victorianbusinessinvestmentisforecastusingacombinationofmethods,includingtheoutputofaneconometricmodelmodifiedwithadjustmentsinformedbypartialindicatorsandqualitativeanalysis.

Econometricanalysisisundertakenwithasingleequationordinaryleastsquaresmodel.BusinessinvestmentforecastsareexplainedbychangestothelendingmarginforinvestmentinAustralianbusinessandmovementsintheriskfreecostofcapital(thecashrate).VictorianbusinessconditionsandhistoricallevelsofVictorianbusinessinvestmentaretheotherexplanatoryvariables.

Thelendingmarginisthedifferencebetweenthecostofborrowingforasmallbusinessandtheriskfreerateofreturn.ThesmallbusinessweightedaveragerateoncreditoutstandingissourcedfromtheRBAandtheofficialcashrateisusedasaproxyfortheriskfreecostofcapital.AdecreaseinthelendingmarginindicatesthatlendersrequirealowerrateofreturntoinvestinAustralianbusiness.Lowerrequiredratesofreturnwillhaveapositiveeffectonbusinessinvestment.Adecreaseintheofficialcashrateleadstolowerborrowingcosts,andpositivelyaffectsbusinessinvestment.

Whentheeconomyisperformingwellandbusinessconditionsarepositive,businessinvestmenttendstogrow.SurveydatafromtheNationalAustraliaBank(NAB)isusedasthemeasureofbusinessconditionsinVictoria.

Alargecomponentofbusinessinvestmentislongterm,sobusinessinvestmentinthepreviousquarteriscorrelatedwithcurrentlevelsofbusinessinvestment.Investmentinertiaisincludedintheformoflastquarter'sgrowthinVictorianbusinessinvestment.

Becausebusinessinvestmentishighlyvolatileandtherearelimitedexplanatoryvariablesofstatisticalsignificance,DTFusesanumberofotherindicatorstoinformtheforecasts.Theseincludebusinesscapacityutilisation(fromtheNABbusinesssurvey),investmentintentionsinformation(fromtheDeloitteAccessEconomicsInvestmentMonitor),surveydataaboutprofitability(fromNABbusinesssurvey),buildingactivity(fromABS),theABSsurveyofinvestmentintentions(PrivateNewCapitalExpenditureandExpectedExpenditure,Australia)andinformationfrombusinessliaison.

Thetrendgrowthrateofbusinessinvestmentisinformedbythehistoricalaverageandtheprojectedtrendgrowthoftheeconomy.

Datasources

BusinessinvestmentdataaresourcedfromABS,AustralianNationalAccounts;officialinterestratesareobtainedfromtheRBA;anddataonthecostofborrowingforsmallbusinessesareobtainedfromtheRBA,IndicatorLendingRates,TableF5.BusinessconditionsareobtainedfromtheNABMonthlyBusinessSurvey(availableonsubscription).

Governmentexpenditure

Definition

Governmentexpenditure(publicfinaldemand)representsactivitygeneratedbyvariouslevelsofgovernment(Commonwealth,stateandlocal)withintheeconomythroughitsconsumptionofgoodsandservicesandgrossfixedcapitalformation(i.e.,investment).

Method

PublicfinaldemandforecastsarebasedonannouncedpolicyandspendingintentionsoftheCommonwealthGovernment,andVictorianGovernmentspendingcommitmentsinthecurrentbudget.Theforecastsareinformedby,butnotlimitedto,policyannouncements,electioncommitments,industryintelligence,informationfromwithinDTFandfinancialinformationinbudgetdocuments.Thisinformationisusedtoformulateanoutlookforlikelyfuturegovernmentexpenditure.

Inthenearterm,proxiesforABScomponentsofgovernmentexpenditureareconstructedfromthelatestABSdataandpublishedfinancialstatementsinthelatestavailablebudgetorbudgetupdatefortheCommonwealthandVictoriangovernments.Theproxiesareused,alongwithforecastsofpopulationgrowthandotherinformationaboutgovernmentspendingintentions,toinformthegrowthrateforecasts.

Laterintheforwardestimates,thetrendgrowthratedominatestheforecast.ThetrendgrowthrateofgovernmentexpenditureisestimatedtocorrespondcloselytothetrendgrowthrateofGSP.

Datasources

Forecastsbygovernmentsoftheirownexpenditure–ascontainedinthelatestpublishedbudgetandbudgetupdatedocuments–areanimportantsourceofinformationforestimatingpublicdemand.

AnnualgovernmentexpenditureisobtainedfromABS,AustralianNationalAccounts:StateAccounts.QuarterlydataareobtainedfromABS,AustralianNationalAccounts.Additionally,theABSGovernmentFinanceStatisticsareusedtoprovidehistoricalgovernmentfiscaldataonabasisconsistentwiththeABSNationalAccounts,aswellasfordisaggregationofstateversuslocalconsumptionandgrossfixedcapitalformation.

HistoricalpopulationdataaresourcedfromABS,AustralianDemographicStatistics(catalogue3101.0).Victorianestimatedresidentialpopulationon30Juneistakentorepresentpopulationfortheprecedingfinancialyear.Thepopulationforecastmethodologyisdescribedlaterinthisdocument.

Netinternationaltrade

Netinternationaltradeistotalgoodsandservicesexportslesstotalgoodsandservicesimports.

Internationalgoodstrade

Definition

Goodsexportsandimportscomprisethevolumeofmovablegoodsthatchangeownershipbetweenresidentsandnonresidentsandaregenerallyvaluedattheboundaryoftheexportingcountry.Theydonotincludeshippingcostsbetweencountries(whicharecountedastradeintransportationservices).

Method

Aswithothermacroeconomicvariables,DTFusesamixtureofformal(econometric)andinformalmethodstoforecastvolumesoftradedgoods.DTFusesanerrorcorrectionmodeltoforecastmerchandiseexports.

InformalinformationincludescontemporaneousdatasuchasknowledgeofcurrentandprospectiveweatherconditionsaffectingVictoria’scropproduction,whichcanthenbeexpectedtoflowthroughtoexports.

Merchandiseexports

Themerchandiseexportsmodeltakesintoaccountoverseasdemand,asmeasuredbytheVictorianexport-weightedmajortradingpartnergrowth,andrelativeprices,asmeasuredbytherealexport-weightedexchangerate.

Merchandiseimports

ForecastsofVictorianimportvolumesaremadeusinganordinaryleastsquaresmodel.ImportvolumesaredeterminedbythepriceofimportsrelativetodomesticproductionandthelevelofeconomicactivityinVictoria.

Importpricesaredrivenbyworldinflationandtheexchangerate.ThisisbecauseVictoriaisrelativelysmallcomparedwiththeglobaleconomy.Thepriceofdomesticproductionisproxiedbytheproducerpriceindexforthemanufacturingindustry.ThisisbecausethebulkofVictoria’simportsaremanufacturedgoods.Thepriceofdomesticproductionisdrivenbythecostofitsinputstoproduction,namelycapitalandlabour.Thecashrateisusedasaproxyforthecostofcapital,whileaveragecompensationofworkersisusedasaproxyforthecostoflabour.

ThecalculationofthetrendgrowthratesofmerchandiseexportsandimportsisinformedbythelongtermaveragegrowthratesofmerchandiseexportsandimportsderivedfromavailableABSdata.

Datasources

TheABSisthemainsourceofmerchandisetradedata.DatafromtheInternationalMonetaryFundWorldEconomicOutlookDatabaseareusedincomputingchangesinrelativepricesandrelativedemandbetweenVictoriaandtherestoftheworld.TheRBAprovidestimeseriesdataforcommoditypricesandexchangerateswhicharealsousedinthemodels.

Othersourcesofinformationaredrawnonasrequired.ExamplesincludeestimatesofVictoriancropyieldsforgoodsexports,andbusinessliaisonforbothexportsandimports.Itisimportantthattradeforecastscanbejustifiedagainstthebackdropofworldevents,andthismeansthatinformationfromawiderangeofsourcesisusedtoapplyjudgementtotheoutputsoftheeconometricmodels.

Internationalserviceexports

Definition

Servicesareintangiblegoods.ExportsofservicesencompassthoseservicesrenderedbyVictorianresidentstononresidents.ThemainserviceexportsforVictoriaareeducationandtourism.Educationisthelargestserviceexportcategory,whiletourismisthesecond-largestcategoryofserviceexportsinVictoria.

Method

Internationalserviceexportsinvolveacombinationofelementsincludingareviewofhistoricaldata,considerationofindicatorvariables,andeconometricanalysisandjudgement.

Econometricanalysisisundertakenwithanordinaryleastsquaresmodel.GrowthinservicesexportsisexplainedbythenumberoftemporaryvisitorarrivalstoVictoriaandthenumberofstudentvisagrantsinAustralia.ThesedependentvariablesareforecastusingordinaryleastsquaresmodelswithARIMAerrors.Temporaryvisitorarrivalforecastsaredrivenbyrelativeprices,astourismispricesensitive.Studentvisagrantsaredrivenbystudentvisaapplications.

TheCOVID19pandemichadaprofoundeffectonVictoria’sservicesexports,asclosednationalborderspreventedinboundtourismandmanyinternationalstudentsstudiedremotelyfromtheirhomecountries.Theforecastmodelusesanindicatorvariabletoaccountforthisperiodeconometrically.

DTFalsomonitorsseveralindicatorvariablestoinformjudgement.TheseincludethestockofstudentvisaholderswithinandoutsideofAustralia,studentvisaarrivalsintoVictoria,internationalcardspendinAustralia,andthetradeweightedindexandotherrelativepricemeasures.

Datasources

DataonVictorianserviceexportsisobtainedfromthequarterlyABSBalanceofPaymentsandInternationalInvestmentPositionrelease.InputvariablesareobtainedfromthemonthlyABSOverseasArrivalsandDeparturerelease,aswellasstudentvisadatafromtheCommonwealthDepartmentofHomeAffairs.OtherABSreleasessuchasInternationalTradeinServicesbyCountry,byStateandbyDetailedServicesCategoryalsoprovidefurtherdetailonthebreakdownofserviceexportsbytypeandbycountry.

Internationalserviceimports

Definition

Serviceimportsencompassthoseservices(thatis,intangiblegoods)renderedbynonresidentstoVictorianresidents.ThemainserviceimportforVictoriaistourism:thatis,overseasholidaystakenbyVictorianresidents.

Method

Forecastsofserviceimportsandexportsaredrawnfromavarietyofsources,includingareviewofrecentandhistoricaldata,considerationofforwardindicatorsandotherinformation,judgementandeconometricanalysis.Theadditionalinformationsourcedfromoutsideoftheeconometricanalysisareincludedasadjustmentfactorstoforecastsgeneratedbythemodel,sothatthepatternofforecastsaccordswiththeoverallassessmentoftheserviceimportsector.

Victorianservicesimportsareforecastusinganerror-correctionmodel.Inthelongrun,growthinservicesimportsisdeterminedbydomesticdemandandtherelativepricebetweenimportedservicesanddomesticservices.Intheshortrun,growthisdeterminedbylaggeddemandandrelativeprices.Servicesimportspricesaredrivenbyworldinflationandthetradeweightedexchangerate.

DTFmonitorsseveralindicatorvariablestoinformjudgement.Theseincludeconsumerconfidence,overseasdepartures,airporttrafficdata,andinternetsearchstatisticsonuseoftravelrelatedsearchterms.

Datasources

DataonVictorianserviceimportsareobtainedfromthequarterlyABSBalanceofPaymentsandInternationalInvestmentPositionreleaseandthequarterlyABSNationalAccountsrelease.OtherABSreleasessuchasInternationalTradeinServicesbyCountry,byStateandbyDetailedServicesCategoryalsoprovidefurtherdetailonthebreakdownofserviceimportsbytypeandbycountry.

ForecastdatafromTourismResearchAustraliaonannualestimatesofoutbounddeparturesaresourcedfromitswebsite.

Balancingitem

Definition

Thebalancingitemcontainscomponentsofexpenditurethataredifficulttomeasure.Notionallyitcapturesnetinterstatetradeingoodsandservices,changesininventoriesandothermiscellaneouscomponents.TheABSestimatesGSPontheincomesideandthebalancingitemis,ineffect,thedifferencebetweentheincomemeasureandallothercomponentsoftheexpendituremeasureofGSP.

Method

ForecastsforthebalancingitemareinformedbyforecastsofGSPgrowthfortheotherstatesandVictorianstatefinaldemandgrowth.However,asVictoria’sbalancingitemcomprisesalargeandvolatilepartofitsGSP,balancingitemforecastsareultimatelyreconciledwithviewsoftheoverallgrowthrateforVictorianGSPinthecontextofeconomicdevelopments.

Employmentandunemploymentrate

DTFforecaststhreecomponentsofthelabourmarket:employment,theunemploymentrateandtheparticipationrate.

Definition

Thelabourmarketreferstotheinteractionbetweenthesupplyanddemandforlabour.TheABSclassifiesthestatusofanindividualasemployed,unemployedornotinthelabourforce.

Employedpersonsarethosewhoundertookpaidworkforoneormorehoursinthereferenceweek,typicallytheweekbeforetheyweresurveyedbytheABS.Unemployedpersonsarethosewhodidnotworkinthesurveyweekbutwereactivelylookingforworkandwereavailabletostartwork.Theunemploymentrateistheratioofunemployedpersonstothelabourforce(thelabourforceisthesumofemployedandunemployedpersons).Theparticipationrateistheratioofthelabourforcetothecivilianpopulationaged15yearsandover.

Method

Employmentandtheunemploymentrateareforecastusingacombinationofeconometricmodelsandjudgement.Theparticipationrateiscalculatedasaresidual.

Thelong-termforecastsforemploymentarebasedonhistoricaltrendsandprojecteddemographicandstructuralshiftsinthelabourforce(e.g.,populationageing).Theshort-termforecastsforemploymentarebasedonalinearmodelthatconsiderssurveyedhiringintentionsandhouseholdconsumptionexpenditure.Judgementisusedtoaccountforfactorsthatarenotfullycapturedbythemodelsuchasjobvacancies,jobadvertisements,surveyedunemploymentexpectationsandtheeffectsofgovernmentpolicychanges.

Theunemploymentrateisestimatedusingalinearmodelthatconsiderstheunemploymentgap.Theunemploymentgapisthedifferencebetweentheunemploymentrateandtheestimatedtrendrateofunemployment.Thetrendrateofunemploymentisestimatedusingamodelthatconsidersstructuralfactorsinthelabourmarket.

Judgementisusedtoreconcilethelabourmarketforecastswiththeoveralleconomicoutlookaslabourisanimportantfactorofproduction.

Datasources

Theworking-agepopulationanditscomponents(employed,unemployedandthosenotinthelabourforce)areincludedintheABSLabourForceSurvey.Thedataarereleasedmonthly.Forecastsofpopulationgrowthareunderpinnedbypopulationprojectionsdescribedbelow.

JobvacanciesdatareportedintheABSJobVacanciesseriesandtheCommonwealthDepartmentofJobsandSmallBusinessmonthlyInternetVacancyIndex.AverageweeklyearningsdataaresourcedfromtheABSpublicationofthesamename.Measuresoffirmhiringintentions(quarterly,originaldata)aresourcedfromtheNABBusinessSurvey,andconsumerunemploymentexpectations(monthly,originaldata)aresourcedfromtheWestpac-MelbourneInstituteConsumerSentimentsurvey.

Wagesgrowth

Definition

TheWagePriceIndex(WPI)isthe‘totalhourlyrateofpayexcludingbonusesindex’.Itisbasedonaweightedcombinationofordinarytimehourlywageandsalaryratesandovertimehourlyrates.Asares