The Business Employment Dynamics report shows -321,000 vs Payroll report +526,000. Believe BED.
Please consider the BLS release Business Employment Dynamics (BEDs) for the second quarter of 2025.
In the second quarter of 2025, gross job losses represented 6.0 percent of private-sector employment. Gross job losses are the result of contractions in employment at existing establishments and the loss of jobs at closing establishments.
In the second quarter of 2025, gross job gains represented 5.7 percent of private-sector employment. Gross job gains are the sum of increases in employment due to expansions at existing establishments and the addition of new jobs at opening establishments.
Gross job losses exceeded gross job gains in 9 out of 13 industry sectors in the second quarter of 2025. The service-providing industries experienced a net job loss of 224,000. The goods-producing industries had a net job decrease of 97,000.
Technical Notes
The Business Employment Dynamics (BED) data are a product of a federal-state cooperative program known as the Quarterly Census of Employment and Wages (QCEW). The BED data are compiled by the U.S. Bureau of Labor Statistics (BLS) from existing QCEW records.
Major exclusions from UI coverage are self-employed workers, religious organizations, most agricultural workers on small farms, all members of the Armed Forces, elected officials in most states, most employees of railroads, some domestic workers, most student workers at schools, and employees of certain small nonprofit organizations.
Gross job gains and gross job losses in this release are derived from longitudinal histories of 9.5 million private-sector employer reports out of 12.2 million total reports of employment and wages submitted by states to BLS in the first quarter of 2025.
The nonfarm payroll Current Employment Statistics (CES) sample size is roughly 119,000 to 149,000 businesses and government agencies.
The CES response rate is about 42 percent. QCEW and BED response is mandatory.
To make up for small samples and poor response rates, the BLS uses a Birth-Death model to estimate job gains and losses from new and closing businesses.
The Birth-Death model is horribly flawed.
BED Gross Job Losses
- Contracting establishments lost 6.3 million jobs in the second quarter of 2025.
- Closing establishments lost 1.6 million jobs.
Bed Gross Job Gains
- Expanding establishments gained 6.1 million jobs in the second quarter of 2025
- Opening establishments gained 1.5 million jobs
BED Establishment Births and Deaths
- In the second quarter of 2025, there were 309,000 establishment births which accounted for 955,000 jobs.
- Data for establishment deaths are available through the third quarter of 2024, when 919,000 jobs were lost at 306,000 establishments.
The lag in deaths are due to the fact that new businesses are easy to spot. Death confirmation requires four quarters of zero jobs.
A small fraction of employment is seasonal. Net losses from closing businesses may be overstated slightly.
BED vs Private Nonfarm Payrolls
For 2025 Q2 BED shows a loss of 321,000. CES shows a gain of 526,000.
Due to sample sizes and response rates, believe the BED report. It is a preliminary look at the next full QCEW report, about 95 percent of jobs.
Notice how wildly wrong nonfarm payrolls have been.
From the third quarter of 2020 until the second quarter of 2023, the BED totals were much higher than CES. This was due to underestimating the Covid rebound and underestimating immigration.
Since the third quarter of 2023, the nonfarm payroll CES reports have overestimated jobs. Much if this is a horribly flawed Birth-Death model. The rest is sampling and non-sampling errors.
BED Job Gains and Losses by Quarter
The economy is now losing jobs faster than it is adding them.
The current net result as shown in the lead chart is -321,000 for 2025 Q2.
Birth-Death Model Net Jobs by Quarter
Birth-Death net jobs are the BLS estimation of jobs gained by new businesses minus job losses from businesses going out of business.
For the second quarter of 2025, the BLS estimates a gain of 530,000 jobs.
Do you believe that? I don’t.
Unfortunately, the BLS does not provide a seasonally adjusted count, and the BED unadjusted number lags by four quarters.
There is no good way to translate 530,000 to seasonally adjusted numbers. However, we can compare the Birth-Death numbers to the same quarter a year ago.
Birth-Death Model Change from Same Quarter a Year Ago
For the last four quarters the change in the Birth-Death model from a year ago has been negative.
I strongly suggest by not enough. However, given the seasonal adjustments vs unadjusted nature of the competing charts I cannot prove that.
Birth-Death Model 2025-Q2 Sectors by Month
Birth-Death Model 2025-Q2 by Sector
The Birth-Death Model 2025 Q2 Numbers
- Total: 530,000
- Construction: 72,000
- Transportation and Utilities: 21,000
- Retail Trade: 24,000
- Professional and Business Services: 111,000
- Private Education and Heath Services: 32,000
- Leisure and Hospitality: 243,000
- Other Services: 28,000
Again those are new business gains minus business closures.
Does anyone really believe those numbers?
BEDs 2025-Q2
The BED report shows gains at opening establishments minus losses at closing establishments for 2025 Q2 was -43,000.
Unfortunately, that is not directly comparable to the alleged Birth-Death model gain of 530,000.
However, the lead chart is comparable because both datasets are seasonally adjusted.
Thus, the best estimate of job changes for 2025 Q2 is -321,000. And the discrepancy with BLS private payroll is a payroll overstatement of approximately 847,000.
The economy is shedding jobs.
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Trump is always talking up his “greatest ever” economy; from either his first term or his second. He also complains about how bad Biden and Obama’s economies were.
A good economy has a lot of job creation. A bad economy has very little job creation.
Let’s look at job creation for the last 4 Presidents.
Bush: +1.3 million
Obama: +11.6 million
Trump 1: -2.7 million (yes, he lost jobs!)
Biden: +14.6 million
Trump 2: zero so far; I wonder if he will exceed his loss of 2.7 million from his first term?
Haven’t seen any comments from Taco’s lemmings as yet?
They get whooped on a bit, and scuttle off to their safe spaces to recover.
They’re a hardy bunch. They’ll be back, and in greater numbers.
They’re working instead of getting paid to protest. The heartland had a lot of tractor trailers on the highway.
Those guys can’t compose a coherent sentence. You never see them around here.
I don’t know why they don’t just report on payroll taxes. The IRS should know exactly how many jobs they’re getting payroll taxes for.
All sorts of bogus reasons.
Quarterly filers for example.
But why not estimate those instead of insane B-D model?
Because the reporting has become politicized?
Surely our elected representatives wouldn’t lie to us!
The IRS does report payroll withholding tax collections, on a daily basis. But they don’t make economic reports out of that data. On the plus side, this means that they’re not screwing it up or gaslighting the public with narrative BS.
There are third-party analysis sites. For instance, you can look at the IRS data up to the most recent 3 months here: https://www.dailyjobsupdate.com/
Daily Jobs Update graphs the annual running total of taxes withheld, on a year-over-year growth basis. This largely eliminates seasonal issues but it can be fooled by changes in the income tax laws.