Economics Archives - Page 2 of 2

Entrepreneurship (as measured by the number of monthly new business applications) remains significantly higher than it was pre-pandemic. This surge in entrepreneurship partly explains why the U.S. labor market has remained so tight. Other factors affecting the U.S. labor market include upward demand shock from fiscal stimulus, excess liquidity from monetary stimulus (liquidity that got channeled into VC funds and startups to hire people, amongst other places), and many other factors related to the massive shifts in lifestyle and workstyle that occurred during the past 2 years. However, entrepreneurship trends varied by industry. Here are some of the most interesting ones. Retail Industry Entrepreneurship Trends The surge in retail business entrepreneurship is the most extreme surge in entrepreneurship seen in any industry during the pandemic. From around 30,000 new retail business applications per month, we skyrocketed to nearly 130,000 per month before coming back down to still about twice pre-pandemic levels. Information Industry Entrepreneurship Trends The information industry includes many types of online businesses so it is somewhat surprising that this type of business did not experience the same surge in entrepreneurship that retail did during the pandemic. Real Estate Industry Entrepreneurship Trends Interestingly, the real estate industry did not really have a pandemic surge in entrepreneurship. It fell off during the first year of the pandemic and then recovered fully during the booming housing market, but it still isn't notably over the pre-pandemic trend. Construction Industry Entrepreneurship Trends Like the real estate industry, the construction industry didn't have a significant deviation in entrepreneurship from its pre-pandemic trend. In fact, entrepreneurship data in the construction industry doesn't really show any sign that the pandemic ever happened. Accommodation and Food Service Entrepreneurship Trends This chart actually surprised me quite a bit. During the lockdowns in 2020, we heard about lots of restaurants failing and hospitality businesses struggling. However, those hardships on existing businesses are not reflected in the entrepreneurship trends for food service and hospitality businesses. Instead, entrepreneurship seems to have spiked almost immediately after the pandemic began.

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Category: Economics