As of April 8, the census is releasing (for a limited time) weekly data on the creation of new businesses. The numbers are part of the census’s Business Formation Statistics, an “experimental data product” that looks at the state of business activity on the national and regional level, and until recently was only released quarterly. The data come from “employer identification numbers” filed with the IRS that are used to identify business entities.

The sharp dip in applications in the last week of this March is larger than any other decline for the same week from 2007 and 2020. The number of business applications plummeted in 2007-08, though not as sharply as they have recently.

Overall, the US economy has become less dynamic in recent years, with the share of new businesses (ones up to two years old) falling from over 25% in 2005 to 20% in 2018.

The decline in business applications was similar across regions, with the largest in the Northeast at 58%. The Midwest was at 45%, the South 38%, and the West 36%. The slowdown, along with the massive job losses, highlight what is likely just the beginning of the economic havoc wreaked by the pandemic.

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