In our last blog post , we explored how employment numbers are recorded among U.S. firms at a single point each year—March 12—and how this approach fails to capture the volatility of employment among small firms with 1–20 workers. In today’s post, we use new data from the SFD USA sample to further illustrate this point. Our researchers gather the number of workers at the firms every two to four weeks. This higher frequency approach allows us to observe changes as they happen:

What is an “employer” firm? Consider the following scenario:   A tutoring business opens in late 2022, staffed only by the owner.    In early 2023, after several months building a client list, she brings on a handful of college students to take on additional clients on a contract basis.   In April 2024, the owner hires her first full-time, W2 employee.  This person departs in early 2025, and she begins looking for a replacement. In May 2025, she hires another W2 employee.  In