BLS U S Bureau of Labor Statistics : Quarterly Data Series on Business Employment Dynamics

For release 10:00 a.m. (EST), Wednesday, January 25, 2017 USDL-17-0106

Technical Information: [phone] • [e-mail] • www.bls.gov/bdm Media Contact: [phone] • [e-mail]

BUSINESS EMPLOYMENT DYNAMICS - SECOND QUARTER 2016

From March 2016 to June 2016, gross job gains from opening and expanding private-sector establishments were 7.5 million, an increase of 486,000 jobs from the previous quarter, the U.S. Bureau of Labor Statistics reported today. Over this period, gross job losses from closing and contracting private-sector establishments were 7.2 million, an increase of 373,000 jobs from the previous quarter. (See tables A, 1, and 3.)

The difference between the number of gross job gains and the number of gross job losses yielded a net employment gain of 307,000 jobs in the private-sector during the second quarter of 2016. (See tables A, 1, and 3.)

The change in the number of jobs over time is the net result of increases and decreases in employment that occur at all businesses in the economy. Business Employment Dynamics (BED) statistics track these changes in employment at private business units from the third month of one quarter to the third month of the next. Gross job gains are the sum of increases in employment from expansions at existing units and the addition of new jobs at opening units. Gross job losses are the result of contractions in employment at existing units and the loss of jobs at closing units. The difference between the number of gross job gains and the number of gross job losses is the net change in employment. (See the Technical Note for more information.)

The BED data series include gross job gains and gross job losses at the establishment level by industry subsector and for the 50 states, the District of Columbia, Puerto Rico, and the Virgin Islands, as well as gross job gains and gross job losses at the firm level by employer size class.

Gross job gains at expanding establishments totaled 6.1 million in the second quarter of 2016, an increase of 278,000 jobs from the previous quarter. (See tables A, 1, and 3.)

Opening establishments accounted for 1.4 million jobs gained in the second quarter of 2016, an increase of 208,000 jobs from the previous quarter. (See tables A, 1, and 3.) Contracting establishments lost 5.8 million jobs in the second quarter of 2016, an increase of 212,000 jobs from the prior quarter. (See tables A, 1, and 3.)

In the second quarter of 2016, closing establishments lost 1.3 million jobs, an increase of 161,000 jobs from the previous quarter. (See tables A, 1, and 3.)

Gross job gains represented 6.2 percent of private-sector employment in the second quarter of 2016, while gross job losses represented 6.0 percent of private-sector employment. (See tables A, 2, and 3.)

In the second quarter of 2016, the number of establishment births (a subset of the openings data, see the Technical Note for more information) increased by 32,000 to 252,000 establishments. These new establishments accounted for 889,000 jobs, an increase of 155,000 jobs from the previous quarter. (See table 8.)

Data for establishment deaths (a subset of the closings data) are available through the third quarter of 2015, when 704,000 jobs were lost at 207,000 establishments. In the prior quarter, 735,000 jobs were lost at 213,000 establishments. (See table 8.)

During the second quarter of 2016, gross job gains exceeded gross job losses in 9 of 13 industries. The sector with the largest net job increase in the second quarter of 2016 was education and health services (+74,000). The net job increase in the education and health services sector was the result of 1.0 million gross job gains and 0.9 million gross job losses. The professional and business services sector showed an increase in gross job gains in the second quarter of 2016 with 1.4 million, compared to 1.2 million in the previous quarter. The level of gross job losses in that sector remained relatively unchanged at 1.4 million in both the first and second quarters of 2016. The goods-producing sectors experienced a net job decrease in the second quarter of 2016, the result of

1.3 million gross job gains and 1.4 million gross job losses. The modest net gain in the construction sector (+7,000) was not enough to compensate for the net losses in the natural resources and mining (-37,000) and manufacturing (-19,000) sectors. (See table 3.)

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Table A. Three-month private-sector gross job gains and losses, seasonally adjusted

Category	3 months ended
	June 2015	Sept. 2015	Dec. 2015	Mar. 2016	June 2016
Gross job gains…………........................ At expanding establishments…........ At opening establishments.…........... Gross job losses…………....................... At contracting establishments........... At closing establishments…............. Net employment change1..…................... Gross job gains……………................. At expanding establishments……. At opening establishments.…........ Gross job losses……………................ At contracting establishments........ At closing establishments….......... Net employment change1.....….............	Levels (in thousands)
	7,588	7,338	7,843	6,977	7,463
	6,244	5,972	6,375	5,778	6,056
	1,344	1,366	1,468	1,199	1,407
	6,773	6,911	6,842	6,783	7,156
	5,573	5,698	5,573	5,617	5,829
	1,200	1,213	1,269	1,166	1,327
	815	427	1,001	194	307
	Rates (percent)
	6.4	6.3	6.6	5.8	6.2
	5.3	5.1	5.4	4.8	5.0
	1.1	1.2	1.2	1.0	1.2
	5.7	5.8	5.8	5.7	6.0
	4.7	4.8	4.7	4.7	4.9
	1.0	1.0	1.1	1.0	1.1
	.7	.5	.8	.1	.2

1The net employment change is the difference between total gross job gains and total gross job losses. See the Technical Note for further information.

In the second quarter of 2016, firms with 1-49 employees had a net employment gain of 28,000. Firms with 50- 249 employees had a net employment gain of 88,000. Firms with 250 or more employees had a net employment gain of 68,000. (See tables 4 and 5.)

Of the 1.7 million net jobs created over the last four quarters, firms with 1-49 employees contributed 33 percent of net job growth, while firms with 50-249 employees contributed 18 percent, and firms with 250 or more employees contributed 49 percent. (See tables 4 and 5.)

In the second quarter of 2016, gross job gains exceeded gross job losses in 29 states and the Virgin Islands. Alaska, North Dakota, Oklahoma, and Wyoming have all experienced gross job losses in excess of gross job gains for the past five quarters. Alaska had the highest rate of gross job gains as a percent of employment at

10.3 percent, above the U.S. rate of 6.2 percent, as well as the highest rate of gross job losses as a percent of employment at 11.9 percent, above the U.S. rate of 6.0 percent. Indiana and Michigan had the lowest rate of gross job losses as a percent of employment at 5.2 percent each. Indiana also had the lowest rate of gross job gains as a percent of employment at 5.2 percent. (See tables 6 and 7.)

More Information

Additional information on gross job gains and gross job losses is available online at www.bls.gov/bdm.

This information includes data on the levels and rates of gross job gains and gross job losses by firm-size, not seasonally adjusted data and other seasonally adjusted time series not presented in this release, charts of gross job gains and gross job losses by industry and firm-size, and frequently asked questions on firm-size data.

Additional information about the Business Employment Dynamics data can be found in the Technical Note of this release or may be obtained by emailing [e-mail].

The Business Employment Dynamics for Third Quarter 2016 are scheduled to be released on Wednesday, April 26, 2017 at 10:00 a.m. (EDT). Technical Note

The Business Employment Dynamics (BED) data are a product of a federal-state cooperative program known as Quarterly Census of Employment and Wages (QCEW). The BED data are compiled by the U.S. Bureau of Labor Statistics (BLS) from existing QCEW records. Most employers in the U.S. are required to file quarterly reports on the employment and wages of workers covered by unemployment insurance (UI) laws, and to pay quarterly UI taxes. The QCEW is based largely on quarterly UI reports which are sent by businesses to the State Workforce Agencies (SWAs). These UI reports are supplemented by two additional BLS data collections to render administrative data into economic statistics. Together these data comprise the QCEW and form the basis of the Bureau's establishment universe sampling frame.

These reports are used to produce the quarterly QCEW data on total employment and wages and the longitudinal BED data on gross job gains and losses. The QCEW is also the employment benchmark for the Current Employment Statistics (CES), Occupational Employment Statistics (OES), and Job Openings and Labor Turnover Survey (JOLTS) programs and is a major input to the Bureau of Economic Analysis's Personal Income Accounts.

In the BED program, the quarterly QCEW records are linked across quarters to provide a longitudinal history for

each establishment. The linkage process allows the tracking of net employment changes at the establishment level, which in turn allows the estimation of jobs gained at opening and expanding units and jobs lost at closing and contracting units.

Differences between QCEW, BED, and CES employment measures

The Bureau publishes three different establishment- based employment measures for any given quarter. Each of these measures - QCEW, BED, and CES - makes use of the quarterly UI employment reports in producing data; however, each measure has a somewhat different universe coverage, estimation procedure, and publication product.

Differences in coverage and estimation methods can result in somewhat different measures of over-the-quarter employment change. It is important to understand program differences and the intended uses of the program products. (See table below.)

Additional information on each program can be obtained from the program web sites shown in the table below.

Summary of Major Differences between QCEW, BED, and CES Employment Measures

QCEW	BED	CES
Source	Count of UI administrative records submitted by 9.6 million employers	Count of longitudinally-linked UI administrative records submitted by 7.7 million private sector employers	Sample Survey: 623,000 establishments
Coverage	UI and UCFE coverage: all employers subject to State and federal UI Laws	UI Coverage, excluding: government, private households, and establishments with zero employment	Non-farm wage and salary jobs: UI Coverage, excluding: agriculture, private households, and self- employed; including: railroads, religious organizations, and other non-UI-covered jobs
Publication frequency	Quarterly - 6 Months after the end of each quarter	Quarterly - 7 Months after the end of each quarter	Monthly - First Friday of following month
Use of UI file	Directly summarizes and publishes each new quarter of UI data	Links each new UI quarter to longitudinal database and directly summarizes gross job gains and losses	Uses UI file as a sampling frame and annually realigns (benchmarks) sample estimates to first quarter UI levels
Principal products	Provides a quarterly and annual universe count of establishments, employment, and wages at the county, MSA, State, and national levels by detailed industry	Provides quarterly employer dynamics data on establishment openings, closings, expansions, and contractions at the national level by NAICS super-sectors, 3- digit NAICS, and by size of firm, and at the state private-sector total level Future expansions will include data at the county and MSA level	Provides current monthly estimates of employment, hours, and earnings at the MSA, State, and national level by industry
Principal uses	Major uses include: Detailed locality data Periodic universe counts for benchmarking sample survey estimates Sample frame for BLS establishment surveys	Major uses include: Business cycle analysis Analysis of employer dynamics underlying economic expansions and contractions Analysis of employment expansion and contraction by size of firm	Major uses include: Principal national economic indicator Official time series for employment change measures Input into other major economic indicators
Program Websites	www.bls.gov/cew/	www.bls.gov/bdm/	www.bls.gov/ces/