On average, expanding establishments added 3.1 jobs per establishment in the second quarter of 2011 while contracting establishments lost an average of 3.3 jobs. Establishments that opened during the second quarter started with an average of 2.8 employees, while closing establishments lost an average of 2.6 employees per establishment.
Establishment births and deaths are different from establishment openings and closings. Openings include both new startups (births) and reopenings of existing seasonal businesses. Similarly, closings include both seasonal businesses that shut down temporarily, as well as establishments that go out of business permanently (deaths).
BED data show that job gains and losses from births and deaths have been trending downwards for at least the last decade, while the numbers of establishment births and deaths have remained relatively stable (Graph 1). These trends mean that, on average, new businesses are starting out smaller. In the first quarter of 2001 there were 4.1 jobs created for each establishment birth, while in the second quarter of 2011 the average was 3.0. Establishments that go out of business are also smaller than in the past. A variety of factors may be contributing to these changes, including rising levels of productivity and the increasing use of temporary help or employee leasing services.
Data on the quarterly gross job gains and losses come from the Business Employment Dynamics program at the U.S.  Bureau of Labor Statistics. A more detailed Business Employment Dynamics Report is available at  www.QualityInfo.org on the Publications page in the News box.