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For the first time on record, U.S. companies are actually dying at a faster rate than they're being born, according to an analysis by the Economic Innovation Group, a non-profit research and advocacy organization.

Why it matters: The slow rate of business starts means the U.S. economy is powered by a narrowing segment of companies, people and geographies — making the overall economy less resilient than it was after previous recessions. When fewer new companies are being born, it's less likely that the companies and jobs that are disappearing will be replaced by better ones. And without competitive pressures from upstarts, big companies are able to grow bigger faster, increasing industry consolidation.

Expand chart
Data: Census Bureau; Chart: Chris Canipe / Axios

"This is new territory for the U.S. economy," said John Lettieri, co-founder of EIG. "Firms that don't get created don't create jobs...The ripple effects are really hard to overstate."The birth rate of new companies collapsed with the Great Recession, and the number of firms that opened during the recovery period is lower than that of any other post-recession period.

The U.S. economy is increasingly reliant on a few metropolitan areas' expansion of companies. Between 2010 and 2014, five metro areas produced the same net increase in firms as the entire rest of the country:

  1. New York
  2. Miami
  3. Los Angeles
  4. Houston
  5. Dallas

Essentially, this means that the number of markets with expanding bases of new companies are dwindling down to a few "hubs," a big departure from the previous three decades when almost all U.S. metro areas consistently created more than enough new companies to replace the ones that closed. In the 1970s, more than one-third of metro areas met or exceeded the national startup rate. By the 2010s, only one in seven metro areas matches or exceeds the national startup rate.

What it means for communities: Areas where a lot of new companies are created tend to enjoy the benefits of stronger local economies, including opportunities to switch jobs, move between regions and earn higher salaries. Fewer communities are now experiencing those benefits, helping to fuel regional inequality, according to EIG. Already-disadvantaged areas seem to suffer the most from the startup slowdown, while thriving areas (typically centered around bigger cities) continued to grow more prosperous.

What happened? EIG suggests declining population growth, a sharp decline in startup capital (notably home equity) during the recession, and changes to the regulatory environment have been factors. The group's full analysis can be found here.

Be smart: This plays into the growing gaps we see across the country between the haves and have-nots, the urban and rural areas — and even political views.

Go deeper

Democrat Mark Kelly sworn in to U.S. Senate

Photo: Courtney Pedroza/Getty Images

Astronaut Mark Kelly (D) was sworn in to the U.S. Senate on Wednesday after defeating incumbent Sen. Martha McSally (R-Ariz.) last month for the seat once held by the late Sen. John McCain.

Why it matters: Kelly's swearing-in by Vice President Mike Pence narrows the Republican majority and moves the Senate balance to 52-48.

Senate Armed Services chair dismisses Trump threat to veto defense bill

Sen. Jim Inhofe. Photo: Anna Moneymaker/Pool/AFP via Getty Images

Sen. Jim Inhofe (R-Okla.), chair of the Senate Armed Services Committee, told reporters Wednesday that he plans to move ahead with a crucial defense-spending bill without provisions that would eliminate tech industry protections, defying a veto threat from President Trump.

Why it matters: Inhofe's public rebuke signals that the Senate could have enough Republican backing to override a potential veto from Trump, who has demanded that the $740 billion National Defense Authorization Act repeal Section 230 of the Communications Decency Act.

Scoop: Uber in talks to sell air taxi business to Joby

Illustration: Sarah Grillo/Axios

Uber is in advanced talks to sell its Uber Elevate unit to Joby Aviation, Axios has learned from multiple sources. A deal could be announced later this month.

Between the lines: Uber Elevate was formed to develop a network of self-driving air taxis, but to date has been most notable for its annual conference devoted to the nascent industry.