Richmond Fed sees steady business filings

Business applications sound dry, but they are one of the cleaner early signals for whether more companies — and eventually more jobs — are on the way. That is why the Richmond Fed’s latest update matters. On April 14, economist John O’Trakoun said the post-pandemic startup wave has not disappeared after all. It softened early in 2025, then turned back up hard, and it is still running above pre-2020 levels. (richmondfed.org) ### What is a business application here? This is mostly about applications for employer identification numbers, or EINs. Filing for one does not guarantee a real employer will open its doors, but it is the first formal step for many new businesses. The Richmond Fed has been tracking these filings because they tend to move with later establishment births — basically, actual new business openings. (richmondfed.org) ### What changed in the new update? The important shift is the direction. Earlier Richmond Fed work in January 2025 argued the pandemic-era formation boom looked like it was fading and reverting toward older trends. But O’Trakoun’s April 2026 note says the most recent data changed that picture: applications dipped close (richmondfed.org) 28, 2026, the average was still around 110,000. (richmondfed.org) ### Why does that matter for jobs? Because these filings have historically moved closely with establishment births. In plain English — more applications now often means more real businesses later. And when new employer businesses open, they create entrant jobs. Richmond Fed researchers had already shown the earlier pandemic jump in applications translated into more openings and more job creation, even if not every filing became a company with payroll. (richmondfed.org) ### Which industries are driving it? The biggest gains versus the 2010-2019 average are in retail trade and professional services, followed by construction, other services, and administrative and support. Retail applications were 76,926 in the latest month versus a 33,515 prepandemic-decade average. Professional services(richmondfed.org)als. (richmondfed.org) ### So is the pandemic startup boom still alive? Yes and no. The catch is that two different claims are floating around. One claim is that the original pandemic shock created a one-time burst of entrepreneurial energy. Richmond Fed economist Chen Yeh argued that specific pandemic effect was temporary and had started fadi(richmondfed.org)h to support more formation ahead. Those ideas can both be true at once. (richmondfed.org) ### Does every filing become a real employer? No — and this is the main caution. Some people file for an EIN for banking, tax, or side-gig reasons and never build a business that hires workers. Richmond Fed research makes that caveat explicit. But the reason economists still care is that the aggregate series has historic(richmondfed.org)richmondfed.org) ### Why should policymakers or employers care? Because this is one of those early-read indicators that can show where labor demand may come from next. If startup activity stays elevated in retail, services, construction, and support industries, local labor markets can stay tighter than a simple “big firms are slowing” story would suggest. New firms are small at first, but they are a big part of gross job creation over time. (richmondfed.org) ### Bottom line? The Richmond Fed is not saying every startup filing turns into a hiring boom. It is saying the pipeline still looks unusually full. After a wobble, business applications picked back up — and that keeps the odds of more business formation and job growth higher than the early-2025 slowdown had suggested. (richmondfed.org)