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 6.8 million jobs in the third quarter of 2008, a decrease of 436,000 from the previous quarter. Over the quarter, expanding establishments added 5.5 million jobs while opening establishments added 1.3 million jobs.
Gross job losses totaled 7.8 million, an increase of 3,000 from the previous quarter. During the quarter, contracting establishments lost 6.4 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 -932,000 jobs in the private sector for third quarter 2008.
Gross job gains represented 6.1 percent of private sector employment, while gross job losses represented 6.9 percent of private sector employment.
Major Industry Sector Gross Job Gains and Gross Job Losses
From June 2008 to September 2008, gross job losses exceeded gross job gains in all but three industry sectors: natural resources and mining, utilities, and education and health services.
Goods-producing. Expanding and opening establishments in the goods producing sectors accounted for 1,397,000 jobs gained, and contracting and closing establishments accounted for 1,767,000 jobs lost. This net loss of 370,000 jobs results in the ninth consecutive quarter of net loss for these sectors of the economy.
Construction. In construction, gross job gains fell over the quarter to 698,000. This is the lowest level of gross job gains since the first quarter of 1993. The construction sector experienced a net loss of 178,000 jobs, even though gross job losses decreased to 876,000. This is the sixth consecutive quarter of net job losses in this sector.
Manufacturing. Gross job gains fell to 425,000 while gross job losses increased to 636,000. The net loss of 211,000 jobs is the ninth consecutive quarter of net job losses in the manufacturing sector.
Service-providing. In the service-providing sectors, gross job gains decreased to 5,425,000 and gross job losses increased to 5,987,000, resulting in a net loss of 562,000 jobs. Job gains at expanding establishments decreased to 4,319,000 jobs, while job losses at contracting establishments increased to 4,890,000 jobs.
Retail Trade. In retail trade, gross job gains decreased to 892,000. Gross job losses also decreased to 1,062,000 for a net loss of 170,000 jobs. This is the largest net loss in this industry since the series began in 1992, driven by the lowest total of gross job gains in the history of this series.
Education and Health Services. Gross job gains increased slightly to 799,000 jobs in the third quarter, while gross job losses decreased to 706,000. This industry sector is the only one which has experienced a net positive change in every quarter since this series began in 1992.
Financial Activities. Gross job losses exceeded gross job gains in the financial sector for the sixth consecutive quarter. Gross job gains fell to 376,000, while gross job losses increased to 460,000, resulting in a net loss of 84,000 jobs in the third quarter.
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 2008, the number of establishments losing jobs exceeded the number of establishments gaining jobs.
Out of 7.0 million active private-sector establishments, a total of 1,987,000 establishments lost jobs from June 2008 to September 2008. Of these establishments, 1,608,000 were contracting establishments and 379,000 were closing establishments. Of the establishments gaining jobs, 1,439,000 establishments were expanding and 349,000 establishments were opening, resulting in 1,788,000 establishments gaining jobs.
The number of closing establishments exceeded the number of opening establishments, resulting in a net loss of 30,000 private-sector establishments during the quarter. This is the sixth quarter that there has been a net decline in the number of establishments since 1992, and the fourth time a decline has occurred in the past six quarters.
Establishment Births and Deaths
From June 2008 to September 2008, a total of 187,000 new private sector non-farm businesses created 813,000 jobs, a drop of 8,000 births and 47,000 jobs from the previous quarter. The jobs created by these new establishments represent 11.9 percent of total gross job gains. The historical time series of birth data shows the number of establishment births has remained around 200,000 every quarter, while employment from births dropped from a high of 1.3 million in the first quarter 1998 to 813,000 in the third quarter of 2008.
Gross Job Gains and Losses by State
In the third quarter of 2008, 7 states and the District of Columbia experienced net employment growth, while 43 states, Puerto Rico, and the Virgin Islands experienced net job losses. The Virgin Islands and four states: Michigan, Nevada, New Jersey, and South Carolina showed rates of gross job gains below the U.S. rate of 6.1 percent and rates of gross job losses above the U.S. rate of 6.9 percent.
Firm-level Gross Job Gains and Gross Job Losses by Size Class
From June 2008 to September 2008, firms with 1 to 4 employees experienced an increase in their share of gross job gains with 16.1 percent, and firms with 1,000 or more employees experienced an increase in gross job losses with 19.3 percent.
