The Governor of the Reserve Bank, Glenn Stevens, warned us about the “measurement issues” in unemployment figures – and yesterday it played out in spectacular fashion.

Which raises a lot of questions for the agency that measures the labour force.

Stevens told an Adelaide audience last week that his researchers had a different reading of the labour market than that provided by the Australian Bureau of Statistics.

“Because of measurement issues, interpretation of that monthly figure is even more hazardous than usual, and this may remain so in the months ahead,” he said.

“Other indicators have mostly suggested a slight improvement in the labour market this year, not an accelerating deterioration.

“The Bank’s reading, which we have had for a while, is that the labour market has a degree of spare capacity, and that it will be a while before we see unemployment decline consistently.”

So, what do we make of yesterday’s national and state unemployment figures?

Nationally, the ABS data showed a record jump in the number of people with jobs.

It said employment rose by a 121,000, the largest monthly increase since records began in 1978.

The rise pushed the unemployment rate down to 6.1 per cent for the month, from the 12-year high of 6.4 per cent in July.

The South Australian figure was even more volatile. It recorded a jump in employment of 7400 – in a month where factories closed, car making was winding down and other data from construction and manufacturing sectors showed continuing slow conditions.

The previous month’s figures were just as wobbly – showing a loss of 6500 jobs.

The ABS Labour Force Survey samples approximately 0.32 per cent of the population of Australia aged 15 years and over.

In SA, that’s about 1500 homes – it should be enough to be accurate.

The labour market has changed, however. There’s more casual employment, under-employment and self-employment.

It’s common for people to be gainfully employed one month and in a pause the next.

The “seasonally adjusted” method takes into account seasonal factors that may make the numbers jump around, such as holidays and major events – but even that adjustment is missing the changeability in the market.

That leaves the “trend” figure; it smoothes out the irregular component of the seasonally adjusted series.

It does this by applying a 13-term weighted moving average to all months except the last six.

It therefore shows the underlying behaviour of a series over time.

For SA the trend shows a labour market that has around 6.7 per cent unemployment and its been in that region since August last year.

Unemployment hasn’t been below 5 per cent in SA since mid-2008. Getting a job has been an issue for more than six years.

Yesterday’s seasonally adjusted number is clearly a crock – so why does the ABS insist on releasing those figures when trend data would be more indicative?

There is no convincing explanation for the sudden surge in employment, especially following a period of weak economic growth.

“There’s no way this economy created 121,000 jobs in the month,” ANZ chief economist Warren Hogan said.

RBC Capital Markets strategist Michael Turner said the numbers “simply do not pass the smell test”, while Citi economists were “skeptical that a domestic economy that is growing below trend and with slower wages growth would suddenly report the largest ever increase in employment”.

The ABS investigated possible causes for the surprise rise in employment numbers but found no deficiencies in its methodologies.

In the meantime, if you want a read of the jobs market, look to the trend figure.

Those who are out of a job don’t need the figures – they know the harsh reality for themselves.