Jan 22, 2024 - News

New business applications level out in Arkansas

Data: Census Bureau; Chart: Axios Visuals
Data: Census Bureau; Chart: Axios Visuals

After spikes during the COVID-19 pandemic, new-business applications across Arkansas grew less than 2% from December 2022 to December 2023.

  • The numbers are based on seasonally adjusted Census Bureau data, write Axios' Alex Fitzpatrick and Alice Feng.

Why it matters: Business formation rates are an excellent indicator of economic sentiment — few people try to start a company when they foresee bad times ahead.

  • Breaking down this data state by state can offer a regionalized barometer of economic sentiment.

The big picture: Nationally, Colorado (+115%), North Dakota (+37.7%) and Iowa (+33.7%) had the highest year-over-year changes in new-business applications.

  • Georgia (-9.9%), Louisiana (-8.6%) and Mississippi (-6.4%) had the largest declines in growth.

The intrigue: Many of the country's emerging, new-business hotspots also have seen recent population spikes.

  • That makes sense — more people, more business opportunities.

Of note: Colorado temporarily lowered the cost of filing for a new business from $50 to $1 from mid-2022 to mid-2023 — in line with a broader billion-dollar statewide push to encourage new-business creation and draw existing employers.

Change in new business applications
Data: Census Bureau; Chart: Axios Visuals

Meanwhile, new businesses with women, Black, Latino, Asian and LGBTQ owners all rose year over year in January-July 2023 compared to the same period in 2022, Axios Closer's Hope King reports from separate Yelp data.

Yes, but: New-business applications can only capture the financial mood among Americans with the means to start a company.

  • Those less well off likely have a less rosy view of things.
  • Many younger Americans, for example, are stressed out about their finances, while renters are much more likely to say they're in bad financial shape compared to homeowners, per recent findings from our ongoing Axios Vibes/Harris Poll surveys.

Plus: Just because somebody files paperwork to start a business doesn't mean that enterprise ever gets off the ground and hires people.

  • Still, when looking only at businesses that the Census Bureau identifies as having a high chance of employing people, new-business applications were up 10.3% nationally from December 2022 to December 2023.

The bottom line: Looking for signs of American optimism? Go west.

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