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Job Quits, New-Business Applications and the Postpandemic Pace of U.S. Business Formation
Within months of the COVID-19 pandemic’s initial lockdowns in 2020, new-business applications in the U.S. rose and have since remained above prepandemic levels. What drove this increase? And is it an indication of a permanent shift in business formation trends?
Similar to how housing permits are a bellwether for the housing market, new-business applications can be an indicator of future business formation. While not all applications will result in businesses with a payroll, the U.S. Census Bureau identifies high-propensity applications as those more likely to become businesses that have at least one paid employee. These new-business applications may contain information about planned wages and hiring or other characteristics predictive of formation.
Similar to how housing permits are a bellwether for the housing market, new-business applications can be an indicator of future business formation. While not all applications will result in businesses with a payroll, the U.S. Census Bureau identifies high-propensity applications as those more likely to become businesses that have at least one paid employee. These new-business applications may contain information about planned wages and hiring or other characteristics predictive of formation.
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