Please try another search
© Reuters. FILE PHOTO: A view shows Main Street in Elk Point, South Dakota, U.S. June 3, 2017. REUTERS/Ryan Henriksen/File Photo
By Safiyah Riddle
(Reuters) - Applications to start new U.S. businesses surged to the highest level in two years in June, despite high interest rates and uncertain economic outlook, according to a Commerce Department report released on Monday.
Business applications increased 6.2% in June compared with May with a seasonally adjusted 465,906 new applications.
Filings from applicants that have a high likelihood of creating a payroll and adding jobs to the economy, such as those from existing corporate entities or those indicating they are already hiring, rose 6.0% to 149,536 new applications. The data is collected from business applications for tax identification numbers.
Start-up activity flourished during the coronavirus pandemic with the help of historic stimulus money from the federal government and ultra-low interest rates, hitting a record high in July 2020 and remaining well above pre-pandemic levels since then. They slowed somewhat last year as the Federal Reserve kicked off aggressive interest rate hikes to lower inflation, but have been climbing again this year.
June's resurgence emphasizes growing optimism among small businesses inspired by the Fed's recent pause in rate hikes, as well as the growing expectation that the central bank's aggressive rate hiking strategy is nearing an end.
The report's forward-looking business formation projections also improved after two months of declines. The Census Bureau estimated that 32,148 new business startups with payroll tax liabilities will actually form within four quarters of application, a 4% increase compared to estimates from May.
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.
I feel that this comment is:
Thank You!
Your report has been sent to our moderators for review
Add a Comment
We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.