Full-Time Entrepreneurship: Resilient or Stagnant?

By at 8 August, 2023, 10:28 am


by Raymond J. Keating –

The latest employment report from the U.S. Bureau of Labor Statistics (BLS) was fairly positive in terms of job gains in July, especially given the fact that the Federal Reserve has been bent on trying to reduce employment growth (or employment?) as a misguided means for fighting inflation.

The establishment survey pointed to nonfarm payroll employment growth at 187,000 in July. Meanwhile, the report’s household survey – which better captures startup and small business activity – showed job gains of 268,000 for July.

A Look at Self-Employment Data

The monthly employment report also is valuable for what it provides in terms of self-employment data. These self-employment numbers capture individuals whose primary occupation is owning a business, and that business can be unincorporated or incorporated, and the self-employed can be sole proprietors or have payroll. So, the BLS self-employment data essentially captures individuals who are full-time entrepreneurs.

As for seasonally-adjusted unincorporated self-employed, it has been on an uneven, five-month decline, going from 10.12 million in February to 9.5 million in July.

That’s troubling.

However, incorporated self-employment data are not seasonally adjusted, so we have to make comparisons to the same month in previous years. Interestingly, the July 2023 level of 7.16 million is the highest July number of incorporated self-employed going back to the start of this dataset in 2000. And the 7.16 million for July 2023 compared to 6.64 million in July 2022, and to 6.23 million in pre-pandemic July 2019.

That’s positive.

However, when we consider, or factor in, seasonally unadjusted unincorporated numbers, the growth shine is lost.

The seasonally unadjusted level for unincorporated self-employed in July 2023 came in at 9.65 million, which was down from the 9.89 million in July 2022 and 10.46 million in July 2021, and compared to 9.82 million in pre-pandemic July 2019.

So, combining the data for a fuller picture of full-time entrepreneurship, the July 2023 total number came in at 16.81 million. That compared to 16.54 million in July 2022, to 16.6 million in July 2021, and to 16.04 million in pre-pandemic July 2019.

Depending on one’s take, either full-time entrepreneurship has been resilient post-pandemic, or it has been relatively stagnant. It seems to me that full-time entrepreneurs were amazingly resilient during the pandemic, but subsequently, we are experiencing stagnation in terms of much-needed growth on the entrepreneurship front.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His latest books on the economy are The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist and The Weekly Economist II: 52 More Quick Reads to Help You Think Like an Economist.

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