WASHINGTON — New business creation in the United States accelerated in recent months after an extended slowdown, with newly released federal data showing entrepreneurs filed more applications to start companies even as higher borrowing costs and inflation continued to weigh on parts of the economy.
The U.S. Census Bureau said business applications rose to a seasonally adjusted 531,423 in June, up 1.1% from May. The agency also projected that nearly 29,800 new employer businesses would emerge from those applications within four quarters, a 0.7% increase from the previous month. The figures marked continued improvement after weaker activity earlier in the year.
The increase suggests business formation is regaining momentum despite an economic environment characterized by elevated financing costs and persistent price pressures. Business applications are widely monitored as an early indicator of entrepreneurial activity and future job creation, although not all applications result in operating firms.
The Census Bureau's Business Formation Statistics track applications for employer identification numbers and estimate how many are likely to develop into businesses with payroll employees. The agency cautions that projected formations are forward-looking estimates rather than counts of businesses already in operation.
Separate surveys point to improving sentiment among small-business owners, although many continue to report significant challenges. The National Federation of Independent Business said its Small Business Optimism Index rose in June, with expectations for business conditions strengthening after a period of uncertainty. At the same time, inflation remained the most frequently cited concern, while employers continued to report difficulty finding qualified workers.
Economists have said recent gains in business applications reflect a combination of traditional entrepreneurship and a growing number of solo ventures, with advances in artificial intelligence and digital tools lowering barriers to starting businesses. Some analysts also note that a portion of new applications may represent self-employed workers and online sellers formalizing operations rather than companies planning to hire employees immediately.
Business applications surged during the COVID-19 pandemic before moderating as interest rates increased and economic growth slowed. Recent Census Bureau releases indicate that activity has begun to recover from that lull, although monthly figures remain subject to revision as additional data become available.
