Sep 26, 2020 - Economy
Millions start new businesses in time of coronavirus
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The pandemic closed hundreds of thousands of U.S. businesses. But now applications for new businesses are rising at the fastest rate since 2007, the Wall Street Journal reports.
Why it matters: "Applications for the employer identification numbers that entrepreneurs need to start a business have passed 3.2 million so far this year, compared with 2.7 million at the same point in 2019," according to the Census Bureau.
- Even excluding gig-economy workers and independent contractors, "new filings among a subset of business owners who tend to employ other workers reached 1.1 million through mid-September, a 12% increase over the same period last year and the most since 2007."
What's happening: "Spending is picking up as cities and states lift restrictions on everything from restaurants to retailers, leading to a rush of activity that had been on hold," The Journal reports.
- At the same time, the virus has led to a sustained shift in consumer behavior: "That has wiped out revenue streams for existing businesses, but also opened up new markets for upstarts."
