Business Applications Boomed. Actual Openings Didn’t.
“Applications” are requests for a federal employer ID—a sign that someone may intend to start a business. “Openings” are new employer establishments that actually began operating. The chart compares economy-wide intent with realized openings; it does not track the same applicants from one stage to the next.
What does it show?
By 2023, employer-ID applications were 95% above their 2015 level, while the rate of new employer establishments actually opening was only 6% higher.
Methodology
Averages the Census Business Formation Statistics seasonally adjusted monthly business-application series within each complete year, aligns it with the Business Dynamics Statistics establishment-entry rate, and indexes both to 2015. The annual-change correlation compares percentage changes in applications with percentage-point changes in the entry rate. Applications are requests for employer identification numbers, while entry measures new establishments among active establishments; they differ in definition, denominator, timing, and revision schedule. The divergence therefore is not a conversion-rate estimate and does not identify which applications became firms.