BLS Experiments With New Data Series: Now I Am Confused

[This post has been revised – see note at bottom]

The Bureau of Labor Statistics (BLS) currently does not break down employment numbers by size of firm – and Econintersect has been relying on the data published by ADP in their monthly employment reports.  However, the BLS is now thinking of providing this breakdown.

The Current Employment Statistics (CES) program is examining the feasibility of publishing monthly CES employment, hours, and earnings estimates by firm size. Currently, BLS publishes the first preliminary CES employment estimates for a given month at selected industry detail. Subsequent estimates for that month are published in more industry detail with the following month’s first estimates. Research suggests that the available sample may make it feasible to publish monthly size-class employment estimates by major industry sector together with the first preliminary estimates. Employment change by firm size would add a valuable dimension of detail to understanding current employment trends.

The BLS provided a chart of the historical data updated through March 2011.

What struck me immediately is that this data is the reverse of  ADP.  ADP shows small and medium size business as the employment drivers while BLS is showing big business is the only game in town. (note all data and graphs on in this post is private non-farm seasonally adjusted payrolls).

The table below compares employment growth shown by this experimental series and the ADP data.

Employment Growth from January 2010 to March 2011



Business Less than 50 696 325
Business 50 to 499 employees 711 502
Business with employment 500+ 22 1098
totals 1,429 1,925

If this is not confusing enough, the employment in each firm size group is very different.

Econintersect is contacting ADP to get clarification of the reasons for the data disconnect.  BLS has stated they do not know ADP’s methodology.

The Congressional Budget Office (CBO) has issued a report on the role of small business in jobs creation stating:

Small firms are sometimes described as the engine of job growth, but the more accurate view is that new small firms are a particularly important source of job growth.

Small firms employ a substantial share of all workers and are among the most dynamic employers in the economy. That very dynamism, however, leads small firms to both create and eliminate jobs at higher rates than larger firms do, in part because small firms come in to and go out of existence at much higher rates than their larger counterparts—a pattern that persisted through the most recent recession.

So, while small firms do generate jobs at higher rates, on net, than larger firms do, that relationship arises primarily because new firms, which typically start out small, create a comparatively large share of net new jobs. Conversely, older, more established small firms create a comparatively small share of net new jobs.

Are you confused too?

Revisions to this article:

A report by the Congressional Budget Office (CBO) has been added. (12Mar2012)

The original post identified that the BLS data was based on non-farm payrolls (which include government employees) – the BLS data was private non-farm which does not include government employees. (15Feb2012)

The original graphs produced by Econintersect used seasonally adjusted data for ADP, but unadjusted data for BLS.  The current graphs use seasonally adjusted private non-farm payrolls for both ADP and BLS. (15Feb2012)

The original article suggested there was a disconnect between the totals of the firm breakdowns, and the BLS CES data base.  There is no disconnect, and this comment has been removed. (15Feb2012)

The concluding sentence with stated Econintersect was seeking clarification from the BLS has been removed.  The final sentences was changed that Econintersect is now contacting ADP. (15Feb2012)

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