From March to June 2004, the number of job gains from opening and expanding establishments was 7.9 million, and the number of job losses from closing and contracting establishments was 7.3 million, according to preliminary data released today by the Bureau of Labor Statistics of the U.S. Department of Labor. During the second quarter of 2004, the continued rise in gross job gains and a drop in gross job losses led to the fourth consecutive quarterly net gain in private sector employment.
Business Employment Dynamics statistics are derived from the Quarterly Census of Employment and Wages (QCEW), also known as the ES-202 program. Gross job gains are defined as increases in employment resulting from expansions of employment at existing establishments or from the opening of establishments. Gross job losses are defined as declines in employment at existing establishments or from the closing of establishments. The difference between the number of gross jobs gained and the number of gross jobs lost is the net change in employment.
Private Sector Gross Job Gains and Job Losses
Opening and expanding private sector business establishments gained 7.9 million jobs, or 112,000 more than in the first quarter of 2004. Over the quarter, expanding establishments added 6.3 million jobs, while opening establishments added 1.6 million.Gross job losses totaled 7.3 million in the second quarter of 2004, down by 47,000 from the first quarter of 2004. Gross job losses continued the downward trend that started in the third quarter of 2001. In the second quarter of 2004, contracting establishments lost 5.7 million jobs, while closing establishments accounted for a loss of 1.5 million jobs.
From March to June 2004, gross job gains represented 7.2 percent of private sector employment, unchanged from the previous quarter. Gross job losses were at 6.7 percent of private sector employment, a drop of 0.1 percentage point from the previous quarter. 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
During the second quarter of 2004, gross job gains exceeded gross job losses in the goods-producing sector for the second straight quarter. This was the first consecutive quarterly net gain in this sector since March 2000. Expanding and opening establishments in the goods-producing sector gained 1,696,000 jobs, while contracting and closing establishments lost 1,647,000 jobs, for a net gain of 49,000 jobs. Quarterly job gains in manufacturing dropped to 604,000, while gross job losses fell to a new low of 586,000, leading to the first quarterly net gain in that sector since March 2000. In construction, gross job gains decreased to 809,000 and gross job losses increased to 779,000, for a net gain of 30,000. This represents the fourth consecutive quarter of net employment gains for this sector.Gross job gains in the service-providing sector totaled 6.2 million jobs, exceeding gross job losses in that sector by 545,000 jobs. During the quarter, gross job gains rose strongly in professional and business services, financial activities, and leisure and hospitality, while they were little changed in other service-providing sectors. The information sector gained 151,000 jobs and lost 182,000 jobs for a net loss of 31,000 jobs. The information sector has experienced a net job loss in 13 of the last 14 quarters.
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 second quarter of 2004, the number of opening establishments exceeded the number of closing establishments, leading to a net addition of 13,000 units to the number of total active private sector establishments. In addition, the number of establishments gaining jobs continued to surpass the number of establishments losing jobs. A total of 1.8 million establishments out of 6.5 million active private sector establishments gained jobs from March to June 2004. Of these, 1.5 million were expanding establishments and 343,000 were opening establishments. During the second quarter of 2004, 1.8 million establishments lost jobs. Of these, 1.5 million were contracting establishments and 330,000 were closing establishments.---
If you would like to contact the Economics Guide you can do so by using the Feedback Form.
