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. 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 jobs gained and the number of gross jobs lost is the net change in employment.
Private Sector Establishment-Level Gross Job Gains and Gross Job Losses
Opening and expanding private sector business establishments gained 7.7 million jobs in the fourth quarter of 2007, an increase of 401,000 from the previous quarter. Over the quarter, expanding establishments added 6.2 million jobs while opening establishments added 1.4 million jobs.
Gross job losses totaled 7.3 million, a decrease of 151,000 from the previous quarter. During the quarter, contracting establishments lost 6.0 million jobs, while closing establishments lost 1.3 million jobs. The difference between the number of gross jobs gained and the number of gross jobs lost yielded a net change of 317,000 jobs in the private sector for fourth quarter 2007. This marks a return to positive net job gains after a net job loss (-235,000) in third quarter 2007.
From September to December 2007, gross job gains represented 6.8 percent of private sector employment, while gross job losses represented 6.5 percent of private sector employment.
Major Industry Sector Gross Job Gains and Gross Job Losses
Gross job gains exceeded gross job losses at the following sectors: natural resources and mining, wholesale trade, retail trade, transportation and warehousing, utilities, professional and business services, education and health services, leisure and hospitality, and other services. Gross job gains at expanding establishments increased for all major industry sectors except information (117,000).
Goods-producing. Expanding and opening establishments in the goods- producing sectors accounted for 1,561,000 jobs gained, and contracting and closing establishments accounted for 1,690,000 jobs lost. This net loss of 129,000 jobs was the sixth consecutive quarter of net loss.
Construction. In construction, gross job gains rose over the quarter to 777,000 and gross job losses increased slightly to 870,000, resulting in a net loss of 93,000 jobs. This sector experienced net losses in five of the previous six quarters including the record net loss of -107,000 in the third quarter 2007.
Manufacturing. Gross job gains rose to 495,000 while gross job losses fell slightly to 561,000. Despite the recent downward trend in gross job losses, this sector continues to experience a net loss of -66,000 jobs, the sixth consecutive quarter of net job losses.
Service-providing. In the service-providing sectors, gross job gains[ increased to 6,089,000 and gross job losses decreased to 5,643,000. Job gains at expanding establishments increased to 4,881,000 jobs, while job losses at contracting establishments decreased to 4,567,000 jobs.
Education and Health Services. In the education and health services sector, gross job gains increased to 810,000 jobs in the fourth quarter. Job gains at opening establishments decreased to 115,000 jobs, while job gains at expanding establ shments increased to 695,000. Gross job losses decreased to 667,000. Gross job losses have not been larger than gross job gains since this series began in 1992.
Retail Trade. In retail trade, gross job gains increased to 1,019,000; this is the first increase in gross gains since March 2007. Gross job losses dropped to 1,007,000. Leisure and Hospitality. The leisure and hospitality industry gained 1,240,000 jobs and lost 1,144,000 jobs. The increase in job gains and decrease in job losses returned this sector to positive net change (96,000) in the fourth quarter of 2007.
Financial Activities. For the third consecutive quarter, gross job losses (486,000) exceeded gross job gains (432,000).
Number of Establishments Gaining and Losing Employment
Another way to look at the dynamics of business activities is to monitor the number and proportion of business units that are growing and declining. In the fourth quarter of 2007, the number of establishments gaining jobs exceeded the number of establishments losing jobs.
Out of 7.1 million active private-sector establishments, a total of 1,923,000 establishments lost jobs from September to December 2007. Of these establishments, 1,566,000 were contracting establishments and 357,000 were closing establishments. Of the establishments gaining jobs, 1,556,000 establishments were expanding and 380,000 establishments were opening, resulting in 1,936,000 establishments gaining jobs.
The number of opening establishments (380,000) increased while the number of closing establishments (357,000) decreased, resulting in a net addition of 23,000 establishments during the quarter.
Firm-level Gross Job Gains and Gross Job Losses by Size Class
From September to December 2007, firms with 1,000 or more employees accounted for the largest share of gross job gains (19.3 percent). This was a significant increase in the share of gross job gains for the largest size class over the fourth quarter. Shares of gross job gains fell or remained the same at all other size classes.
Firms with 1,000 or more employees had the largest share of gross job losses (16.7 percent), followed by firms with 1 to 4 employees with 16.1 percent.
Gross Job Gains and Losses by State
Over the fourth quarter, Nevada had the largest increase in rate of gross job gains (7.6 percent, up from 6.1 percent in third quarter 2007), while Minnesota and Missouri saw the largest decreases in rate of gross job gains. Gross job gains increased in 42 states, the District of Columbia, and the Virgin Islands, and gross job losses decreased in 38 states, the District of Columbia, Puerto Rico and the Virgin Islands.
