The BLS BED report provides further confirmation the BLS Birth/Death jobs model is seriously screwed up. 
Please consider the very lagging BLS Business Employment Dynamics report for the second quarter of 2022.
The BED report analyzes net job creation from new business and firms going out of business.
Key BED Statistics
- From March 2024 to June 2024 private-sector gains were 7.6 million, a decrease of 17,000 jobs from the previous quarter.
- Private-sector losses were 7.8 million, an increase of 639,000 jobs from the previous quarter.
- The difference between the number of gross job gains and the number of gross job losses yielded a net employment decline of 163,000 jobs in the private sector during the second quarter of 2024.
BED Statistics by Firm Size
- In the second quarter of 2024, firms with 1 to 49 employees had a net employment loss of 259,000.
- Firms with 50 to 249 employees had a net employment gain of 57,000.
- Firms with 250 or more employees had a net employment decline of 25,000.
Small businesses are struggling like mad. This is something the ADP reports also show.
Establishment Births and Deaths
- In the second quarter of 2024, the number of establishment births (a subset of the openings data) increased by 4,000 to a total of 326,000 establishments. These new establishments accounted for 975,000 jobs, an increase of 41,000 jobs from the previous quarter.
- Data for establishment deaths (a subset of the closings data) are available through the third quarter of 2023, when 927,000 jobs were lost at 295,000 establishments, an increase of 40,000 jobs from the second quarter of 2023.
Although the BED data on net jobs and the number of new businesses is through 2024 Q2, the number of closing businesses is only through 2023 Q3.
However, the important number is employment and that is through June of 2024.
Birth-Death Model
The lead chart shows that it is very rare for there to be net losses due to the birth and death of businesses.
Prior to covid, the trend of business openings and closings were similar. Now they wildly differ.
This is important because the BLS monthly jobs report includes a factor called the Birth-Death Model in which the BLS estimates the numbers of jobs created by the birth and death of businesses.
I have many times stated the monthly jobs reports are bogus due to sampling errors and birth-death assumptions.
BLS Survey Response Rates
Response Rate Notes
- CES: BLS Current Employment Statistics – The Monthly Nonfarm Payroll Establishment Survey
- JOLTS: BLS Job Openings and Labor Turnover Survey
The pathetic response rate for nonfarm payrolls is 43.3 percent down from 60.0 percent pre-Covid
The pathetic response rate for JOLTS is 33.4 percent down from 58.4 percent pre-Covid.
Response Rates and Survival Bias Issues
- First, firms that go out of business don’t respond. This is known as survival bias.
- Second, larger businesses are more likely to have someone who routinely answers such questions.
- Third, businesses of all sizes are deciding they have better things to do than answer BLS surveys.
- Fourth, businesses that are doing well are more likely to spend the time than businesses that are struggling or understaffed
BLS Sample Sizes
- Quarterly Census of Employment and Wages (QCEW) : 97 percent of bobs
- Business Employment Dynamics (BEDS): 92 percent of jobs
- Current Employment Statistics (CES): 27 Percent
The above numbers from CES FAQ
Of that 27 percent, the response rate is 43 percent with serious survival bias issues detailed above.
BED Net vs Nonfarm Payrolls
As noted, nonfarm payrolls (CES) represent all jobs whereas BED is only net business creation.
However, the relationship between BED and CES was stable pre-covid and now is anything but stable.
For five straight quarters, nonfarm payrolls wildly exceeded net BEDS jobs.
Birth-Death Model Jobs
Does anyone believe we added 653,000 jobs in the second quarter of 2024 due to net business creation?
Before you answer, please note those are unadjusted numbers. The BLS takes those unadjusted numbers adds them to unadjusted CES numbers then seasonally adjusts the mess for its monthly jobs report.
Q: What is the seasonally-adjusted birth-death number?
A: I don’t know, you don’t know, and not even the BLS knows.
Seriously, the BLS itself has no idea and that is what they have told me on multiple occasions.
It is wrong to subtract unadjusted numbers from smoothed and massaged adjusted numbers.
The Birth-Death numbers for 2024 Q2 were 363,000 in April, 231,000 in May, and 59,000 in June making the quarterly total 653,000 jobs.
653,000 jobs seems like a lot, and it is, but relative to total nonfarm payrolls of nearly 160 million its not that great.
December 2024 Example
- Unadjusted Nonfarm Payrolls: 160,458,000 by flawed survey
- Unadjusted Birth-Death by flawed estimate: -52,000
- Reported Seasonally Adjusted Number: 159,536,000 up by 256,000
I tried working with unadjusted birth-death numbers vs unadjusted BEDS but got similar wild-looking results.
BEDs vs Birth-Death Unadjusted Numbers
- 2024 Q1 Birth-Death: +9,000
- 2024 Q1 BEDS: -1,522
- 2024 Q2 Birth-Death: +653,000
- 2024 Q2 BEDS: -163,000
Seasonally-Adjusted BEDs vs Unadjusted BEDS
- 2024 Q1 BEDS SA: +493,000
- 2024 Q1 BEDS NSA: -1,522,000
- 2024 Q2 BEDS SA: -163,000
- 2024 Q2 BEDS NSA: +2,355,000
Four Things We Know
- QCEW and BEDS confirm the nonfarm payrolls are substantially overstated and have been for about two years.
- The BLS Birth-Death model assumptions are very flawed vs the hard data of BEDS and QCEW.
- The Fed and economists are using highly unreliable and overstated jobs data to make interest rate decisions.
- The BLS needs a serious overhaul of its data collection and modeling methods.
I hope you appreciate just how messed up this is.
I believe that why we have such a discrepancy between Gross Domestic Product (GDP) and Gross Domestic Income (GDI), numbers that should match but don’t.
Related Posts
January 30, 2025: 4th-Quarter Real GDP Increased 2.3 Percent, Good, Bad, and Ugly Details
The BEA reports GDP rose 2.3 percent vs a consensus 2.6 percent. But details are mixed.
Unfortunately, we will not have GDI numbers for two more months and it will be 5 months before we have a revised 2024 Q4 GDI.
September 5, 2024: Small Businesses Reducing Workers for the Last Four Months
ADP data shows small businesses with 1-49 workers have been reducing workers for four months. Those with 20-49 workers have shed workers for 7 straight months.
It’s been a while since I updated my ADP charts and will do so in February. But note that CES confirms ADP. In the second quarter of 2024, firms with 1 to 49 employees had a net employment loss of 259,000.
Small businesses are struggling.
And among other errors, it’s highly likely the BLS is oversampling large businesses or getting whacked hard on survival bias in its surveys.
They should take the L out of BLS.
Perhaps the BLS should be on the DOGE cut list.
In 2023, more than 50 million people turned to the charitable food system, including food banks, pantries, and meal programs.
feedingamerica.org
This reflects an increase from 2022, when approximately 49 million individuals sought assistance.
As of early 2025, comprehensive data for 2024 is still being compiled. However, preliminary reports indicate that food insecurity remained a significant concern in the United States throughout 2024. In June 2024, approximately 80% of responding food banks reported either an increase or a steady demand for food assistance compared to June 2023, with around 65% noting a rise in the number of individuals served.
Government should also take the statistic of the food banks. Its easier and reliable.
Not necessarily. It doesn’t take into account people that don’t budget properly. They spend on cable, internet, junk food, booze, etc. and then use the food banks. Also, most food banks don’t require proof of income so you have people using them that aren’t poor.
I know its not perfect. Not perfect like inflation expectation static.
You can roughly figure it out.
– The BLS BED report provides further confirmation the BLS Birth/Death jobs model is seriously screwed up.
> I agree, and have agreed with you for a long time now!
– I have many times stated the monthly jobs reports are bogus due to sampling errors and birth-death assumptions.
> You Most Certainly have indeed said so many times, and this brings me to my questions in regards to such data.
1. This started around Covid, which appears to be when a lot of things started, and many are still in play. It appears to me, that perhaps it’s possible that this was a “Planned Sequence of Events”
2. Covid seems to be the “Trigger” for a lot of skewed or questionable numbers, facts, history, etc. So did Covid “Trigger” events, or was Covid “The Trigger” for them to appear?
3. If something nefarious was going on, and perhaps still is, can it be unwound, or is it firmly in place by design. Can it be stopped, or is it a series of events that coincide with one another, and actually assist the fall in a slow manner, to hide the “Crash” we have yet to totally recognize?
Not being a “Conspiracy Theorist” but simply pointing out the obvious. A lot of strange happenings and not a whole lot of explanations being offered up? People in Government “Must Know” the Truth of it all, but are they just not sharing, part of the plan, simple manipulation as we have seen for years now, or is it A “Nothing to see here, so move along” sort of thing?
Curious of You’re thoughts on this…
If bubble asset prices are allowed to deflate, and if Congress and the Fed quit the price fixing of interest rates, and if tptb quits warmongering like threatening Panama or Greenland, that would be the most proper and least painful way to unwind.
Trump to Zelensky: if u settle with Putin Ukraine will become an EU member, but not a NATO member. Hamas became a police force. They can’t exist without Israel and Israel can’t live without a peaceful Jasa. The 3 divorced states isn’t a viable solution. Within a decade or two they will be united like the EU and the UK, a tiny democratic state with population of 13/15 millions.
The US GDP: $30T. US population: 330 millions. The EU GDP: $20T. Population: 450 millions. The Chines GDP: $19T. Population: 1.4 billion. The US isn’t shrinking. When our national industry be in full steam, protected by tariffs, the US GDP will grow faster than our population. Debt: $30T. The US GDP: $40T.
Glad to see you have not changed your analysis/approach regarding their garbage in/garbage out analysis.
It’s a gig economy for the foreseeable future.
Trump’s EPA Just Deleted Climate Change
The environmental agency just scrubbed most mentions of the global crisis from its online presence. ok than TOMORROW write an executive order that orders the insurance companies to provide affordable insurance.
The insurance prices are rising because costs are rising and the forward yield of insurance company assets is poor due to the everything bubble.
Climate change in this context is just a red herring to distract from the failure of government to properly restrain construction and sources of risk in high-risk areas.
Agreed. It has been seriously screwed up which is why I prefer to look at other stats such as the social security snapshot, the St. Louis Fed labor participation rate, Census data and other business data because BLS data is crap.
An economy is the exchange of goods and services between people, all the other noise (interest rates, debt, policy, taxation, birth/death models, etc) is just noise.
To that end, we need to carefully look at what is and has been happening with people (the real economy).
I could go on but that’s where the real data, analysis and projections will come from moving forward. And you add it all up and it’s easy to figure out where this economy is headed. Add back the noise and it becomes even worse.
Ironically, Spain, a country with its own demographic problems, is having a booming economy. The secret, open the door to tourists, digital nomads, and immigrants….
https://www.euronews.com/business/2024/10/31/why-is-spains-economy-growing-faster-than-those-of-its-eurozone-peers
Of course the locals don’t like it so choose your poison, economic stagnation and no immigrants or economic growth and immigrants. Seems the pairs go hand in hand.
When a model refuses to take into account the record number of excess deaths and disabilities in the working age population – caused by the Covid Vaccines.
Then the model is worse than USELESS
– The young people have entirely different view on ‘work’ and the production of goods and services (i.e. give me high pay for low quality work).
> I tend to view it from the perspective, that “The Young” are not being taught to work. They are not being taught work ethic, and total service, etc.
Some examples:
1. When I worked as a youngster at a grocery store, when someone asked Me how to find something, I was trained to “Escort” the shopper to the item, and mention the aisle number out loud for them.
2. When I worked and was younger, I was always taught to “Leave Things the way you found them”
3. When I worked as a youngster, I was always given physical chores, labor, clean up etc.
– They now say aisle 8, I think, and go back to work.
– They now take things and just shove them back someplace around where they got it from, if your lucky
– They now say that’s too hard, too heavy, or too demanding for them.
In many instances anyway…Not All of course. This tells me, that are either just Not being taught, don’t listen and are not being called out on it, or we just let it go, as to not hurt their feelings or some BS like that… not entirely the kids fault being my point!
Yes, the ‘work ethic’ has been ‘educated out’ of the average, middle-class youth’s developing brain.
That they might work in a job that requires sweat and getting their hands dirty is now thought to be beneath them.
What would their peers think of them if they were to be seen working in construction or some other demeaning job???
Instead, many get degrees that will get not much more than a Starbucks barista job.
But at least that is seen as acceptable to their peers.
And, it’s in an air-conditioned, non-strenuous environment that will tolerate the man-buns, nose rings and ear gauges.
In the ’80’s, the construction trades were used by many of my friends as a training stage and launching pad to start their own businesses.
Electricians, framing contractors, drywall contractors, concrete contractors and other relatively high-paying businesses.
There was no peer pressure to ‘be better than that’.
Superman Trump has only been on the job one week. Tariffs will turn it around
Only a fool would start a business now. The great en-serfening has begin!
Elon Musk’s Friends Have Infiltrated Another Government AgencyElon Musk’s former employees are trying to use White House credentials to access General Services Administration tech, giving them the potential to remote into laptops, read emails, and more, sources say.
https://www.wired.com/story/elon-musk-lackeys-general-services-administration/
Coup d’oeil: The notion or faculty of rapidly taking a general view of a position and estimating its advantages and disadvantages. Coup de main: A sudden and vigorous attack. Coup d’état: A sudden and great change in the government carried out violently or illegally. Coup de foudre: A sudden unforeseen event, in particular an instance of love at first sight.
That doesn’t sound good
But hey, having America hating, Islamic convert John Brennan as CIA Director was apparently ok..
And the other Lying, Above-Top-Secret, High-Level, 51 ‘Russia’ Laptop conspirators who controlled the most sensitive agencies @ Fed Gov was Good!
And the Joe Biden Family Corruption Conglomerate, controlled by CCP/China and the Deep State was acceptable.
And having CCP/China infiltrate and buy off as many DC swamp critters, Academics and Hollywood Studios as they can is no problem.
And the North and South Borders wide open and absorbing every sort of human debris that the Third World couldn’t wait to get rid of.
None of the above mattered. As long as it wasn’t Trump.
COVID was such a shock to the global economy that it has taken 5 years to settle around the levels of pre-COVID.The stimulus was also a shock, and looks to have worn off.
We the Mexicans to come to our American donkey shows, not the other way around.