U.S. business applications hit record highs, ending decades-long slump

U.S. business applications remained at record levels in 2024, after 5.5 million new applications were filed in 2023 and 5.2 million more followed in 2024. The numbers mark a sharp break from the decades-long lull that has defined much of the last two decades of entrepreneurship, but they also raise a harder question: how many of those filings become real firms with workers.

The Census Bureau’s Business Formation Statistics track early-stage business formations through Internal Revenue Service Employer Identification Number applications on Form SS-4. The series is released monthly, typically 11 to 12 days after the end of the observed month, and the bureau stopped publishing weekly estimates on a weekly basis as of Aug. 29, 2024. The data cover national, regional, state, industry and county levels, and in September 2024 the bureau released monthly business applications for Puerto Rico for the first time.

That distinction matters because the application surge is not the same thing as a wave of established employers. Some filings reflect side hustles or one-person sole proprietorships, while others turn into firms that hire staff and expand. The application count measures the pipeline of new activity, not the final roster of wage-paying businesses, which is why analysts have long treated it as an early signal rather than a finished tally.

The broader backdrop is still one of weakness. In October 2024, congressional researchers said the past two decades of research point to a decades-long slowdown in multiple measures of entrepreneurship. They cited two recurring explanations: difficulty accessing capital and a decline in the working-age population. Against that history, the recent jump in filings looks less like a smooth, broad-based entrepreneurial renaissance than a rebound occurring inside a tighter labor market and a more expensive economy.

Richmond Fed researchers have described the trend as a continuing business formation boom, and a 2025 Richmond Fed brief asked whether the pandemic surge in employer business formation would last. That question still hangs over the record figures. For all the headline strength in business applications, the lasting test is how many of those filings become durable firms that hire, invest and scale rather than stopping at the point of registration.