Annual business employment dynamics statistics

The Business Employment Dynamics program releases quarterly gross job gain and gross job loss statistics, and this year it is releasing annual statistics for the first time.

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There are three main reasons that annual measures of gross job gains and gross job losses should be produced despite the availability of quarterly measures. The first is to enhance people’s understanding of labor market dynamics. Gross job gains and gross job losses measured on an annual basis—the first quarter of each year, for example—are not affected by any seasonal employment variation that occurs during the year.

The second reason to produce annual statistics is related to the internal structure of the Business Employment Dynamics program. The program publishes statistics on establishment births and establishment deaths, and the definitions of births and deaths differ from the definitions of openings and closings that underlie the statistics that have been published thus far. Businesses are allowed to and often do report zero employment to the State unemployment insurance systems for several quarters after they have effectively closed.

This undoubtedly occurs when a business owner temporarily shuts down the business but anticipates starting it up again when economic conditions improve. As a result, in any given quarter one observes many businesses closing, but which of these businesses will start up again and which will die cannot be determined for several more quarters. The Business Employment Dynamics definition of establishment death requires four consecutive quarters of no positive employment, and implementing this definition requires longitudinally linking five consecutive quarters of cross-sectional microdata. An output derived from this five-quarter linkage is annual gross job gain and gross job loss statistics.

The third reason for creating annual Business Employment Dynamics statistics is to satisfy demands from data users. Annual data can be compared with similar statistics from the U.S. Census Bureau and from statistical agencies in other countries.

These data are from the BLS Business Employment Dynamics program. To learn more, see "Business employment dynamics: annual tabulations," (PDF) by Akbar Sadeghi, James R. Spletzer, and David M. Talan, Monthly Labor Review, May 2009.