The change in aggregate employment is the difference between gross job creations and gross job destructions. Job gains occur in new establishments and those that are expanding, whereas job losses take place in establishments that are closing or contracting. About 7% of all private sector jobs are created or destroyed each quarter. In 2003:IIQ, there were sizeable flows of both job gains (7.5 million) and job losses (7.7 million). Job losses are highly counter-cyclical, as illustrated by their peak during the 2001 recession period (the shaded area in the upper two charts). Although job destructions have fallen almost continuously since peaking in 2001 (2003:IQ excepted), they have still outpaced job gains, leading to continued reductions in aggregate employment. Nevertheless, there is encouraging evidence—a 69,000 increase in job gains from 2003:IQ to 2003:IIQ, the first such increase since 2002:IQ.
Suggested citation: "Employment Changes." Federal Reserve Bank of Cleveland, Economic Trends, no. 04-03, p. 13, 03.01.2004.