A new firm need not appear immediately in the payroll survey to affect its employment estimate. In the October 7, 2016 release, BLS explained that new businesses enter its sampling frame with a lag. It therefore used a model-based adjustment for the net employment effect of business births and deaths, rather than relying only on firms already answering the survey. [jobs2016]
That mechanism matters when reading September’s 156,000 payroll gain as evidence about enterprise. The figure was not a census of every newly opened workplace. BLS said it added new businesses to the survey twice a year and later anchored estimates to employment counts from unemployment-insurance tax records. Our inference is limited: an early payroll snapshot cannot by itself establish how much competitive entry occurred. [jobs2016]
BEA’s September 30 release defines personal income to include income from owning a business as well as employee compensation and other sources. It excludes realized and unrealized capital gains. That distinction gives business readers another useful boundary: an owner’s income and a rise in the value of the business are not interchangeable entries in this measure. August’s 0.2 percent overall income increase was not a reported return on entrepreneurship. [income2016]
To test a claim that new competitors were driving the economy, readers would need direct evidence about entrants, their jobs and their income—not just these aggregate headlines. That is an analytical requirement, not proof that entry was weak or strong. This October 9 weekend retrospective uses prior releases, not a Sunday announcement, and preserves the estimates available then, including BEA’s now-superseded release. [jobs2016][income2016]
Source documents
- Personal Income and Outlays, August 2016https://www.bea.gov/news/2016/personal-income-and-outlays-august-2016
- Employment Situation, September 2016https://www.bls.gov/news.release/archives/empsit_10072016.htm