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

USDL-19-0137

For release 10:00 a.m. (EST), Wednesday, January 30, 2019

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

BUSINESS EMPLOYMENT DYNAMICS - SECOND QUARTER 2018

From March 2018 to June 2018, gross job gains from opening and expanding private-sector establishments were 7.6 million, an increase of 233,000 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 536,000 jobs from the previous quarter. The difference between the number of gross job gains and the number of gross job losses yielded a net employment gain of 437,000 jobs in the private sector during the second quarter of 2018. (See chart 1, and tables A and 1.)

Chart 1. Total private sector gross job gains and gross job losses, seasonally adjusted March 2008 - June 2018

Thousands 10,000

9,000

8,000

7,000

6,000

5,000

Gross job gains

Gross job losses

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 NOTE: Shaded area represents National Bureau of Economic Research (NBER) defined recession period.

2018

Notice Regarding South Carolina Business Employment Dynamics Data

Business Employment Dynamics (BED) data for first and second quarter 2018 for South Carolina show unusual movements, which may be a result of a change in reporting. These unusual movements coincide with a modernization of the South Carolina unemployment insurance system. For more information, please visit:www.bls.gov/cew/2018-notice-regarding-south-carolina-employment-and-wages-data.htm.

The change in the number of jobs over time is the net result of increases and decreases in employment that occur at all private businesses in the economy. Business Employment Dynamics statistics track these changes in employment at private-sector establishments from the third month of one quarter to the third month of the next. The difference between the number of gross job gains and the number of gross job losses is the net change in employment. (See Technical Note.) The BED data series include gross job gains and gross job losses by industry subsector, 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

In the second quarter of 2018, gross job gains represented 6.1 percent of private-sector employment. Gross job gains are the sum of increases in employment due to expansions at existing establishments and the addition of new jobs at opening establishments. Gross job gains at expanding establishments totaled 6.2 million in the second quarter of 2018, an increase of 174,000 jobs compared to the previous quarter. Opening establishments accounted for 1.4 million of the jobs gained in the second quarter of 2018, an increase of 59,000 jobs from the previous quarter. (See charts 2 and 3, and tables A, 1, 2, and 3.)

Gross Job Losses

In the second quarter of 2018, gross job losses represented 5.8 percent of private-sector employment. Gross job losses are the result of contractions in employment at existing establishments and the loss of jobs at closing establishments. Contracting establishments lost 5.9 million jobs in the second quarter of 2018, an increase of 416,000 jobs from the prior quarter. In the second quarter of 2018, closing establishments lost 1.3 million jobs, an increase of 120,000 jobs from the previous quarter. (See charts 2 and 3, and tables A, 1, 2, and 3.)

Chart 2. Private sector gross job gains at expanding establishments and gross job losses at contracting establishments, seasonally adjusted: March 2008 - June 2018

Chart 3. Private sector gross job gains at opening establishments and gross job losses at closing establishments, seasonally adjusted: March 2008 - June 2018

Thousands 7,500

6,500

5,500

4,500 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18

Expansions

Contractions

Thousands 1,600 1,500 1,400 1,300 1,200 1,100 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18

Openings

Closings

NOTE: Shaded area represents NBER defined recession period.

NOTE: Shaded area represents NBER defined recession period.

Establishment Births and Deaths

In the second quarter of 2018, the number of establishment births (a subset of the openings data) increased by 13,000, to a total of 263,000 establishments. These new establishments accounted for 878,000 jobs, an increase of 61,000 jobs from the previous quarter. Data for establishment deaths (a subset of the closings data) are available through the third quarter of 2017, when 763,000 jobs were lost at 226,000 establishments, an increase of 3,000 jobs from the second quarter of 2017. (See Technical Note and table 8.)

Industries

Gross job gains exceeded gross job losses in 9 of 13 industries in the second quarter of 2018. The service-providing industries experienced a net job increase of 295,000 jobs in the second quarter of 2018. Within service-providing industries, professional and business services had the largest over-the-quarter net job increase, with a gain of 102,000 jobs. The net job increase in professional and business services was the result of 1.5 million gross job gains and 1.4 million gross job losses. The retail trade industry had the largest decrease among service-providing industries, with a loss of 53,000 jobs. The goods-producing industries experienced a net job increase of 142,000 jobs in the second quarter of 2018. Of the goods-producing industries, manufacturing added 63,000 jobs, construction added 51,000, and natural resources and mining experienced a net increase of 28,000 jobs. (See table 3.)

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

3 months ended

Category	June	Sept.	Dec.	Mar.	June
2017	2017	2017	2018	2018
Levels (in thousands)
Gross job gains ...................................	7,624	7,311	7,826	7,406	7,639
At expanding establishments ......	6,255	5,959	6,383	6,071	6,245
At opening establishments ..........	1,369	1,352	1,443	1,335	1,394
Gross job losses .................................	7,161	7,404	6,847	6,666	7,202
At contracting establishments ....	5,889	6,106	5,547	5,526	5,942
At closing establishments ...........	1,272	1,298	1,300	1,140	1,260
Net employment change1 ..................	463	-93	979	740	437
Rates (percent)
Gross job gains ...................................	6.2	6.0	6.4	6.0	6.1
At expanding establishments ......	5.1	4.9	5.2	4.9	5.0
At opening establishments ..........	1.1	1.1	1.2	1.1	1.1
Gross job losses .................................	5.8	6.1	5.6	5.4	5.8
At contracting establishments ....	4.8	5.0	4.5	4.5	4.8
At closing establishments ...........	1.0	1.1	1.1	0.9	1.0
Net employment change1 ..................	0.4	-0.1	0.8	0.6	0.3

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

Firm Size

In the second quarter of 2018, firms with 1-49 employees had a net employment gain of 137,000. Firms with 50-249 employees had a net employment gain of 154,000. Firms with 250 or more employees had a net employment gain of 167,000. (See tables 4 and 5.)

States

Gross job gains exceeded gross job losses in 39 states and the District of Columbia in the second quarter of 2018. Among the states, Alaska had the highest rate of gross job gains as a percent of employment at 10.9 percent, above the U.S. rate of 6.1 percent. Arkansas had the lowest rate of gross job gains as a percent of employment at 5.0 percent. Alaska had the highest rate of gross job losses as a percent of employment at 10.7 percent, above the national rate of 5.8 percent. Connecticut had the lowest rate of gross job losses as a percent of employment at 5.0 percent. (See tables 6 and 7.)

For More Information

Additional information on gross job gains and gross job losses is available online atwww.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 can be obtained by [e-mail].

The Business Employment Dynamics for Third Quarter 2018 are scheduled to be released on Wednesday, April 24, 2019 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 rec-ords. 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 supple-mented by two additional BLS data collections to render administra-tive 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 Employ-ment 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 establish-ment. The linkage process allows the tracking of net employment changes at the establishment level, which in turn allows the estima-tion of jobs gained at opening and expanding units and jobs lost at closing and contracting units.

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

QCEW	BED	CES
Source	• Count of UI administrative records submitted by 10.0 million establish-ments in first quarter of 2018	• Count of longitudinally-linked UI ad-ministrative records submitted by 8.0 million private-sector establishments	• Sample survey: 651,000 establishments
Coverage	• UI and UCFE coverage, including all employers subject to state and federal UI laws	• UI coverage, excluding government, private households, and establish-ments with zero employment	Nonfarm wage and salary jobs: • UI coverage, excluding agriculture, private households, and self-employed workers • Other employment, including railroads, religious organizations, and other non-UI-covered jobs
Publication fre-quency	• Quarterly - 6 months after the end of each quarter	• Quarterly - 7 months after the end of each quarter	• Monthly - Usually the 3rd Friday after the end of the week including the 12th of the month
Use of UI file	• Directly summarizes and publishes each new quarter of UI data	• Links each new UI quarter to longitu-dinal database and directly summa-rizes gross job gains and losses	• Uses UI file as a sampling frame and to annually realign sample-based estimates to population counts (benchmarking)
Principal products	• Provides a quarterly and annual uni-verse count of establishments, em-ployment, and wages at the county, metropolitan statistical area (MSA), state, and national levels by detailed industry	• Provides quarterly employer dynam-ics 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 to-tal level • Future expansions will include data with greater industry detail and data at the county and MSA level	• Provides current monthly estimates of employment, hours, and earnings at the MSA, state, and national level by indus-try
Principal uses	• Major uses include: - Detailed locality data - Periodic universe counts for benchmarking sample survey es-timates - Sample frame for BLS establish-ment surveys	• Major uses include: - Business cycle analysis - Analysis of employer dynamics underlying economic expansions and contractions - Analysis of employment expan-sion and contraction by size of firm	• Major uses include: - Principal federal economic indicator - Official time series for employment change measures - Input into other major economic in-dicators
Program Web sites	•www.bls.gov/cew	•www.bls.gov/bdm	•www.bls.gov/ces