The number of new business applications in July was 425,698, which is another strong month.
Although down from their all-time high in 2020, applications in 2022 have averaged about 420,000 per month. This is about 40% higher than before the pandemic.
The business application data comes from IRS Employment Identification Numbers (EIN) applications. EINs are the tax id number that identifies a business for tax purposes.
Most applications (about 70%) are from firms the Census calls "applications other than high propensity" (grey in the chart; click to enlarge).
These are applications from businesses that are unlikely to have employees, such as freelancers, independent contractors, and other types of solopreneurs.
"High propensity applications" (yellow in the chart) is Census speak for firms they think are likely to hire traditional employees.
As the above chart illustrates, the share of solopreneur applications has steadily increased over the past decade.
Retail continues to be the industry with the most applications. This has been the case since the surge of applications started in 2020. Professional services is second, consistent with its position since the pandemic began.
As we pointed out earlier this year, only about 20% of applications for tax I.D.s result in a new business starting.
But the continuing high levels of business applications means a corresponding surge in new employer small businesses and solopreneurs.
