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April 2004, Vol. 127, No. 4
Business employment dynamics: new data on gross job gains and losses
James R. Spletzer, R. Jason Faberman, Akbar Sadeghi, David M. Talan, and Richard L. Clayton
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.
This excerpt is from an article published in the April 2004 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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