Commentary
In today’s great debate over whether the economy is in recession or not, the pace of new business formation would say “not yet.” At least it seems to say that on the surface. Put into context, recent data may not carry quite that powerful positive message.
The underlying consideration is the lingering effect of all the opportunities opened by the pandemic-induced lockdowns and quarantines. Entrepreneurs rushed in to fill the gap left by this raft of business failures and, accordingly, have kept applications for new businesses at historically high levels. They will likely continue to do so for a while yet, until all those opportunities are exhausted, even in the face of an economic weakness that would otherwise cause a more pronounced pullback in new business formations….