The monthly employment situation report from the Bureau
of Labor Statistics always makes headlines, but other BLS data, although
less closely watched, can reveal long-term trends that are even more
important. The latest data on business employment dynamics are a case in point.
The
Business Employment Dynamics project tracks data on total jobs created
and destroyed by US firms, based on a quarterly sample survey. Unlike
the monthly jobs data, it looks separately at jobs created by new and
expanding firms and jobs destroyed by firms that close or contract. The chart shows those data through Q2 2016.
One's first impulse, in looking at the employment
dynamics data, is to focus on net job gains. The data show an unbroken
string of net job gains since the beginning of the recovery from the
Great Recession. That is certainly good news, even if it only confirms
what we already knew from the monthly payroll jobs data.
If
we read the chart differently, though, we get a picture of long-term
trends that is not so favorable. Suppose that instead of subtracting job losses from job gains, we add the two numbers. That gives us a measure that economists call the job reallocation rate. What does this unfamiliar number tell us that data on net job gains do not? >>>
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