In a positive sign for the U.S. economy, small business sentiment has reached a six-month high, driven by a surge in new startups and increased hiring intentions. According to recent reports, U.S. small business applications have hit a remarkable monthly average of 430,000 in 2024, marking a 50% increase from 2019 levels. This trend reflects a growing entrepreneurial spirit, fueled by several factors, including easing inflation and more favorable lending conditions.
The surge in startup applications is particularly noteworthy because it indicates a strong desire for entrepreneurship across the country. In addition to the overall growth in applications, the number of businesses planning to hire employees has also increased significantly, reaching 140,000 per month. This is a 30% rise from pre-pandemic levels in 2019, a clear sign that small businesses are not just opening up but are also gearing up to expand their workforce.
This boom in small business activity is contributing to the broader economic recovery. Small businesses now account for 70% of net new jobs created in the United States, up from 64% in the previous cycle. This rise underscores the pivotal role small enterprises play in the job market and the economy at large. As more small businesses open their doors and hire workers, the ripple effects extend across communities, creating job opportunities and fostering economic growth at the local level.
A recent U.S. Treasury report highlights that small business sentiment has been improving in the face of rising optimism, supported by the easing of inflation and lending conditions. With inflation showing signs of slowing, many small business owners feel more confident about their ability to manage costs and grow their operations. Additionally, relaxed lending criteria are providing easier access to capital, further bolstering the positive outlook in the sector.
As inflation pressures begin to subside and credit conditions become more favorable, small business owners are optimistic about the future. The positive sentiment is not only reflected in increased startup applications but also in the growing number of businesses that are planning to expand their workforce. This trend signals that the U.S. small business sector is on a path to strong recovery, contributing significantly to job creation and economic vitality.
