Business Employment Dynamics: New Data on Gross Job Gains and Losses: The New BLS Business Employment Dynamics Data Series Captures Establishment-Level Employment Changes That Are Absent from Other BLS Series; the Detail Provided Gives Researchers Insight into Business Openings, Closings, Expansions, and Contractions across the Stages of the Business Cycle

By Spletzer, James R.; Faberman, R. Jason et al. | Monthly Labor Review, April 2004 | Go to article overview

Business Employment Dynamics: New Data on Gross Job Gains and Losses: The New BLS Business Employment Dynamics Data Series Captures Establishment-Level Employment Changes That Are Absent from Other BLS Series; the Detail Provided Gives Researchers Insight into Business Openings, Closings, Expansions, and Contractions across the Stages of the Business Cycle


Spletzer, James R., Faberman, R. Jason, Sadeghi, Akbar, Talan, David M., Clayton, Richard L., Monthly Labor Review


One of the most watched economic indicators in the United States is the monthly change in nonfarm payroll employment released by the Bureau of Labor Statistics. Changes in this indicator can affect stock market movements and interest rate decisions considerably. The monthly change in nonfarm payroll employment gives the net change in the number of jobs over a particular month--the overall change, given that some establishments have opened, some have expanded, some have contracted, and some have closed. This article presents new BLS data on quarterly gross job gains and losses, documents their magnitude, and examines the historical time series having to do with these statistics from 1992 to 2003.

The new BLS measures of gross job gains and gross job losses afford a more thorough understanding of the employment decisions of the millions of business establishments in the U.S. economy. Examining establishment-level employment changes aids in analyzing both the large gross job flows that underlie the substantially smaller net employment changes and the establishment-level employment dynamics across various stages of the business cycle.

The article begins with definitions of gross job gains and gross job losses. Following this introductory section are a description of the source data used by the Bureau to generate estimates of quarterly gross job gains and gross job losses and an explanation of the methodology employed for longitudinally linking establishment records. The heart of the article is the presentation of the new BLS business employment dynamics data series, together with an analysis of the levels and movements of gross job gains and gross job losses during the past 10 years. Special attention is given to technical issues such as the seasonal adjustment of gross job gains and gross job losses, how the business employment dynamics data compare with other BLS establishment-based employment series, and establishment openings and closings relative to births and deaths. The article concludes with a summary of ongoing work and planned future enhancements to the gross job gains and gross job loss statistics at the Bureau.

Concepts and definitions

The net result of the millions of business establishments in the U.S. economy changing their specific employment levels is a change in aggregate employment from one quarter to the next. While this aggregate net change identifies the overall growth or decline of the labor market, it does not convey the underlying heterogeneity of the many establishments that open, expand, contract, and close every quarter. By contrast, statistics on gross job gains and gross job losses aggregate the establishment-level employment changes in such a way that one can observe and assess the underlying dynamics. (1)

The Bureau uses a number of definitions pertaining to gross job gains and gross job losses. Gross job gains are the sum of all employment increases at either opening or expanding establishments. An opening establishment is an establishment that has positive employment in the current quarter and that either had zero employment or was not in the database the previous quarter. An expanding establishment is a continuous unit that increases its employment from a positive level in the previous quarter to a higher level in the current quarter. Gross job losses are the sum of all employment losses at either closing or contracting establishments. A closing establishment is an establishment that had positive employment in the previous quarter and that either has zero employment or is not in the database in the current quarter. A contracting establishment is a continuous unit that decreases its employment from the previous quarter to a lower positive level in the current quarter. The familiar net change in employment is the difference between the gross job gains and the gross job losses.

Many establishments do not change their level of employment from one quarter to the next. …

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Business Employment Dynamics: New Data on Gross Job Gains and Losses: The New BLS Business Employment Dynamics Data Series Captures Establishment-Level Employment Changes That Are Absent from Other BLS Series; the Detail Provided Gives Researchers Insight into Business Openings, Closings, Expansions, and Contractions across the Stages of the Business Cycle
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