largest share of gross job losses (16.4 ercent).
The Business Employment Dynamics (BED) data series include gross job gains and gross job losses at the establishment level by major industry sector 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.
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 Job Losses
Opening and expanding private sector business establishments gained 7.2 million jobs in the third quarter of 2007, a decrease of 395,000 from the previous quarter. Over the quarter, expanding establishments added 5.8 million jobs, while opening establishments added 1.4 million jobs.
Gross job losses totaled 7.5 million, an increase of 81,000 from the previous quarter. During the quarter, contracting establishments lost 6.1 million jobs, while closing establishments lost 1.4 million jobs.
The difference between the number of gross jobs gained and the number of gross jobs lost yielded a net change of -235,000 jobs in the private sector for third quarter 2007. This is the first quarter of net job losses since the second quarter of 2003.
From June 2007 to September 2007, gross job gains represented 6.4 percent of private sector employment, while gross job losses represented 6.6 percent of private sector employment. These gross job gain and loss statistics demonstrate that a sizable number of jobs appear and disappear in the relatively short time frame of one quarter.
Major Industry Sector Gross Job Gains and Gross Job Losses
Net losses were seen this quarter in all but three sectors of the economy: utilities, wholesale trade, and education and health
services. These industries showed gains of 1,000, 2,000, and 113,000 jobs, respectively.
Goods-producing. Expanding and opening establishments in the goods-producing sector accounted for 1,486,000 jobs gained, and
contracting and closing establishments accounted for 1,703,000 jobs lost. This net loss of 217,000 jobs was the fifth consecutive quarter of net loss in this sector.
Construction. In construction, gross job gains fell over the quarter to 762,000 and gross job losses increased to 869,000,resulting in a net loss of 107,000 jobs, the largest net loss since this series began in 1992. Additionally, this sector experienced net losses in four of the five previous quarters.
Manufacturing. Gross job gains and gross job losses in manufacturing fell to levels of 467,000 and 564,000 jobs, respectively, in the third quarter of 2007. Despite the drop in gross job losses, this sector experienced a net loss of 97,000 jobs, the largest net loss in 15 quarters.
Service-providing. In the service-providing sector, gross job gains totaled 5,763,000 and gross job losses totaled 5,781,000,
resulting in a net loss 18,000 jobs. This is the first net loss since the first quarter of 2003.
Education and Health Services. The education and health services sector gained 797,000 jobs and lost 684,000 jobs in the third quarter of 2007, for a net gain of 113,000. This industry has experienced a net job growth every quarter since this series began in 1992.
Retail Trade. In retail trade, gross job gains decreased again this quarter to 996,000 and gross job losses rose to 1,055,000,resulting in a net loss of 59,000 jobs.
Leisure and Hospitality. The leisure and hospitality industry gained 1,158,000 jobs and lost 1,215,000 jobs in the third quarter of 2007, for a net loss of 57,000 jobs.
Financial Activities. The financial activities sector experienced gross job gains of 408,000 and gross job losses of 470,000, resulting
in a net loss of 62,000 jobs. This was the second net loss in this sector since the fourth quarter of 2003.
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 third quarter of 2007, the number of establishments losing jobs exceeded the number of establishments gaining jobs for the second consecutive quarter. Out of 7.0 million active private-sector establishments, a total of 1,944,000 establishments lost jobs from June 2007 to September 2007. This is an increase of 6,000 establishments from last quarter. Of these establishments losing jobs, 1,585,000 were contracting establishments and 359,000 were closing establishments. During the quarter, 1,519,000 establishments expanded and 367,000 establishments opened, resulting in 1,886,000 establishments gaining jobs. The number of active private sector establishments increased by 8,000 during the quarter. This change is the difference between the number of opening establishments and the number of closing establishments.
Firm-level Gross Job Gains and Gross Job Losses by Size Class
From June 2007 to September 2007, firms with 1,000 or more employees accounted for the largest share of gross job gains (16.9 percent) as well as the largest share of gross job losses (16.4 percent).
Small firms, those with 1-4, 5-9, and 10-19 employees, showed an increase in their proportion of gross job gains over the quarter, with shares dropping for all other size classes. The gain was most significant for firms with 1-4 employees, whose share of gross job gains grew from 14.8 percent to 16.0 percent in the third quarter.
The firms with 1-4, 5-9, and 10-19 employees along with the largest size class, firms with 1,000 or more employees, were the only classes
to show a drop in share of gross job losses. Despite the drop, size class 1,000 or more employees maintains the largest share of gross
job losses in the third quarter.
Firms with 1-4 employees continued to have the largest shares of both job gains at opening firms and job losses at closing firms, with 59.8 percent and 59.7 percent respectively, in the third quarter of 2007.
Gross Job Gains and Losses by State
Over the quarter, Wyoming had the highest rate of gross job gains (9.8 percent) and Alaska had the highest rate of gross job losses (11.1 percent). Hawaii had the lowest rate of gross job gains (5.1 percent), while Illinois and Pennsylvania had the lowest rate of gross job losses (5.7 percent each). Gross job losses exceeded gross job gains in 34 states, the District of Columbia and the Virgin Islands, resulting in net losses in total private sector employment.
