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Business formation is up, up, up

Business formation continues to grow like gangbusters:

New business applications are up 6% from last month and 15% from a year ago. I don't know what's going on with this, but it certainly suggests that the economy looks awfully good to a lot of people.

11 thoughts on “Business formation is up, up, up

  1. Eve

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  2. bbleh

    And a shout-out to Obamacare for providing a lot of small business founders with the flexibility to give it a shot.

    1. MikeTheMathGuy

      Good point! This was always the benefit of Obamacare that its opponents chose to ignore. Romney's famous "I like being able to fire people" -- even interpreting it the way he meant it -- got it exactly backwards. Having a fallback plan for health insurance meant that people *could* walk away from their current employment and start new businesses.

  3. Justin

    I just read last week that small businesses were going to get destroyed by higher interest rates. Who can say?

    1. bbleh

      fwiw I'd say fairly insignificant given current expectations for the Fed. A small business is about people and cash-flow, and if your cash-flow is so close to the edge that a bump of a point or two over a year or two in whatever financing you have will push you over, then I'd say you probably got more worries than interest rates.

  4. bluegreysun

    Lots of people decided to try to do their own thing back during the pandemic. Maybe a lot of it is the FIRE people (financial independence, retire early) trying to wring some “passive income” out of the system, drop-shipping Amazon rental property side hustles. Plus the Covid-fraud did require people to pretend to have businesses, though I’m sure that’s washed out by now.

    Meanwhile, on the upper side of the income distribution, a lotta 55+ year olds retired early and are doing their own little - mildly money-losing - vanity businesses. Formerly the domain of their spouses (boutique clothing for pets), now dudes are doing it buying and selling vintage Porsches.

    Not that this happened - we’re all rich now - but if the economy cratered, and we all started darning our neighbors’ socks, selling onions grown in the backyard, chimney sweeping, ladling soup to people sitting on upturned plastic buckets in our driveways, and door-to-door bicycle tire tube patching, that could also look like a lot of business formation. But not necessarily signal a ton of confidence in the economy.

    1. bbleh

      Health Security. Clear echo of Social Security, also a Democratic achievement.

      Democratic Health Care. Explicit link to the party, and also meaningful without the partisan definition.

      Maybe some variant with "American," cuz you can't argue with that.

      ... just spitballing ...

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