US business applications hit record highs, signaling startup boom

Americans filed 5.2 million new business applications in 2024, keeping the startup surge elevated after a record 5.5 million filings in 2023. About 1.8 million of those 2023 applications were high-propensity filings, the category the Census Bureau uses for applications more likely to become employer firms.

The Census Bureau’s Business Formation Statistics program tracks applications for tax IDs through EIN filings, making it one of the clearest national gauges of entrepreneurship. April 2024 alone produced 432,517 business applications, including 139,496 high-propensity applications, and the seasonally adjusted total slipped just 0.5% from March.

That steadiness matters because the surge is being judged against a much longer slowdown in new employer business formation. The State Science & Technology Institute says annual business applications nationwide rose 119%, or nearly three million, from 2005 to 2023. Even so, the share of filings classified as high-propensity has fallen in every sector except health care and social assistance, a sign that a larger pool of filings is not automatically translating into more payroll employers.

That gap is why economists and policymakers are treating the boom as a test of durability rather than a victory lap. The Congressional Research Service pressed the issue directly in its October 23, 2024 report, Is U.S. Entrepreneurship Declining? The question behind that report is whether the post-pandemic jump reflects a lasting shift in business creation or a softer form of entrepreneurship built around side hustles, independent work and firms that never add employees.

The Census Bureau now publishes Business Formation Statistics in monthly, weekly, historical, state and county formats, and those releases have become standard reading for business groups, researchers and markets watching for signs of where new firms are forming and which ones are making the leap into paid employment. The headline counts show entrepreneurship has rebounded sharply. The harder test is whether more of those filings turn into firms that hire, expand and contribute to a deeper, more durable business cycle.