Entrepreneurship plays a vital role in the growth of the U.S. economy. As the primary source for information on the nation’s labor market, the U.S. Bureau of Labor Statistics (BLS) collects data on new businesses and job creation. The following highlights from data series produced by BLS Business Employment Dynamics (BED) program provide insight on the contribution of young and small businesses to the overall number of businesses and jobs in the economy.
Bureau of Labor Statistics publishes data on business births and deaths on a quarterly basis. The birth and death data series is the most timely source of data available on new private sector business establishments in the United States.
As shown in the chart below, the period from 1993 to 2006 was marked by an increase in the number of births and deaths, indicating a higher amount of business “churn”—that is, new business establishments entered and old establishments exited the economy in greater numbers. After the most recent recession began in December 2007, establishment births experienced the steepest decline in the history of the series. The downward trend reversed in early 2010 and establishment births have since returned to pre-recession levels.
The number of jobs created from establishment births peaked in the late 1990s and has experienced an overall decline since then. The decrease in birth-related employment during the latest recession is the largest in the history of the series, followed closely by the period of “jobless recovery” after the 2001 recession.