The U.S. has seen a surge in startup businesses during the coronavirus pandemic, according to data from the federal government, reports The Economist.
The U.S. Census reported a total of 97,190 business applications for the week ending Sept. 19, representing a 41.5 percent year-over-year jump. Additionally, “high-propensity to succeed” business applications, or those best positioned to survive, reached their highest quarterly level on record for the third quarter.
“New businesses play an important role in job creation...New business formation is critical for the employment outlook, with new and younger firms historically accounting for the lion’s share of net job growth,” according to a new research note from Goldman Sachs.
The U.S. economy is still rebounding from the coronavirus pandemic, with job gains waning. The Labor Department almost two weeks ago reported that employers added 661,000 jobs in September, far fewer than forecasters expected, leaving the unemployment rate at a still-high 7.9 percent.
“It’s disturbing that we’re seeing such a dramatic slowdown in employment gains as we head into the fall,” Diane Swonk, chief economist for the accounting firm Grant Thornton, told The New York Times. “This is a red flag. We need aid now.”
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