Business Employment Dynamics: State Gross Flows

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Business Employment Dynamics State Gross Flows
U. S. Bureau of Labor Statistics

• Eric Simants and David M. Talan
• International Conference on Establishment Surveys
• Montreal, QC
• 21 June 2007
• The views expressed here are those of the authors
  and do not necessarily reflect the official
  policy of the U.S. Bureau of Labor Statistics.

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Overview

• Business Employment Dynamics (BED)
• State-level BED time series data
• Recession
• Recovery
• Gross Job Gains and Gross Job Losses and its
  impact on Job Growth

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What is Business Employment Dynamics?

• Longitudinal data series constructed from
  quarterly cross-sectional data
• Analyzes quarterly gross job flows
• Unit of analysis is the Establishment
• An establishment is defined as an economic unit,
  typically located at a unique physical site and
  engaged in predominately one type of production
  activity

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BED Data Elements

• Gross job gains
• Sum of job gains at Expanding and Opening
  establishments
• Gross job losses
• Sum of job losses at Contracting and Closing
  establishments

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State-level BEDTime Series Data

• Data reveal some states began downturn in job
  growth about one year prior to the recession
• Jobless recovery is evident for most states 6
  quarters into the recovery
• Job growth occurring in most states since 2003Q3
• Are more establishments expanding or opening, or
  are less establishments contracting or closing?

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Recession
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Recession

• 2001Q1 shows the first time in the national-level
  BED time series where gross job losses greater
  than gross job gains
• 21 states had gross job losses in excess to gross
  job gains in 2000Q3
• Declining trends for gross job gains coupled with
  increasing trends for gross job losses in most
  states may have been masked in national-level
  time series data

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Influence of larger stateson national BED time
series

• Four largest states in regards to total
  employment (California, Texas, New York and
  Florida) comprise nearly 1/3 of total gross job
  gains and gross job losses nationally
• Gross job gains well above gross job losses in
  these 4 states until 2001Q1

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Influence of larger stateson national BED time
series

• CA, TX, NY, FL combined 2000Q3 data
• Gross job gains 2,804,989
• Gross job losses 2,553,053
• Difference 251,936
• National 2003Q3 data
• Gross job gains 8,724,000
• Gross job losses 8,578,000
• Difference 146,000

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Influence of larger stateson national BED time
series
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Peak of Gross Job Losses

• Gross job losses peak at over 9.1 million for the
  entire nation in 2001Q3
• 8 states (Arizona, Colorado, Florida, Georgia,
  Hawaii, Nevada, Texas and Utah) do not peak until
  2001Q4
• Result of backlash from Sept 11th tragedies or
  consumers tightening spending?

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Peak of Gross Job Losses
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Peak of Gross Job Losses
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Great Lake States

• 5 (IL, IN, MI, OH and WI) states have gross job
  losses greater than gross job gains in 2000Q3
  NY and PA only 2 that didnt
• Began showing negative job growth 2 quarters
  prior to national data
• 3 (IN, MI, WI) have gross job losses greater than
  gross job gains 2000Q3 through 2001Q4

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Great Lake States
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Recovery

• Gross job losses declined rapidly in most all
  states after 2001Q4
• Only 13 (AZ, GA, HI, ID, KS, LA, MS, NE, NV, SC,
  TX, UT, WY) states show gross job gains in 2006Q3
  greater than gross job gains in 1996Q3
• Since 2003Q3 less than half of all states show
  gross job gains less than gross job losses in 2
  quarters or more

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Recovery
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Recovery

• 29 states have gross job losses greater than
  gross job gains in 2006Q3
• CA, MO, NY, OH and PA show lowest levels of gross
  job gains ever in 2006Q3
• On the brink of another recession or just
  temporary adjustment from extremely low levels of
  gross job losses seen in 2006Q1?

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Trends in Gross Job Gainsand Gross Job Losses

• Difference between summed gross job gains and
  summed gross job losses from 2002Q1 2006Q3 is
  positive in all but 5 states
• However, 22 states have declining trends for
  gross job gains
• Trends for gross job losses showing faster
  declines than trends for gross job gains is how
  many states are realizing job growth

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Trends in Gross Job Gainsand Gross Job Losses
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Regional Trends

• Mid-Atlantic (DE, MD, NJ, PA, VA, WV)
• Only 6 states nationally have larger difference
  between gross job gains and gross job losses than
  VA over the past 5 years
• PA has not had a quarter where gross job losses
  exceed gross job gains since 2003Q3 and has only
  happened in 2 quarters in MD since 2003Q1 (2006Q2
  and 2006Q3)

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Regional Trends

• Northeast and Midwest
• Only 5 (CT, IA, MN, NE and SD) states have
  positive trends for gross job gains and declining
  trends for gross job losses since 2002Q1
• Only 4 (IA, MN, NY and WI) states are in the top
  half of states in regards to differences of
  summed gross job gains and summed gross job
  losses since 2002Q1

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Regional Trends

• West and Southeast
• Six (AZ, CA, FL, NV, TX and WA) states showing
  the largest positive differences between summed
  gross job gains and gross job losses since 2002Q1
• Only 7 (AK, CA, KS, KY, MO, NC and TN) states out
  of 27 showing declining trends in both gross job
  gains and gross job losses since 2002Q1

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Summary

• Short-run ebbs and flows of economic activity and
  job growth are unavoidable
• State level BED time series data will prove
  useful in understanding the underlying labor
  market forces driving employment dynamics

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Contact Information

• Eric Simants
• simants.eric_at_bls.gov
• 202/691-5193
• Dave Talan
• talan.david_at_bls.gov
• 202/691-6467
• Group Email BDMInfo_at_bls.gov