Despite last week’s headlines about shocking softer job growth, millions of Americans have been starting businesses at an unprecedented rate. This trend began in 2020 during the 19th pandemic and remained strong. However, this shift is not considered in traditional labor statistics, which only focus on W-2 payroll. New business formation is an important part of the U.S. business landscape and can offset the economic impact of traditional slowdown in job creation.
The Bureau of Labor Statistics (BLS) job growth missed this, and the latest data highlighted it: The economy appears to have added only 73,000 jobs in July 2025, much less than expected and not enough to keep up with population growth. In addition, BLS has made massive revisions to the May and June figures, reporting that the economy will be working 258,000 less in those months than previously said.
The news was quickly translated into a reduction in overall employment, which attracted widespread attention. However, the BLS numbers make us incomplete on the work of the United States. Business Formation Statistics US Census Bureau Shows growth of 6.48% from Q1 Q2 This year. While this does not seem to be a huge growth figure, it is huge compared to the significant decline in the accelerated growth of traditional jobs last year. More importantly, since Covid, new business forms have become increasingly important to economic and employment growth, but in the BLS work report, it has been largely ignored.
Jeff Stibel
Business Form Employment growth is a balanced factor in the U.S. economy, and any economic indicator needs to consider both measures, especially given the surge in new businesses since Covid. The newly formed company immediately creates jobs for founders and for other job seekers, pulling people out of the traditional labor market that BLS exclusively tracks. This artificially expands the assumption of unemployment.
Historically, there is a strong relationship between economic change and entrepreneurship. The lack of traditional job opportunities has inspired people to create jobs for themselves and building new businesses has never been easier. In particular, artificial intelligence enables individuals to start business ideas with minimal startup capital, experience or risk. Ready-to-use tools can build websites, write copies, design graphics and logos, and even find customers. AI can analyze market research without providing pricing strategies and financial forecasts. This rapid change is accelerating the shift to self-employed and micro-business creation, not to mention the increase in freelancing, consulting and “side barriers”. MarketWatch Report In April 2025, 51% of Americans had a side hustle and the country’s youngest workforce participants led the allegation, with 72% of Gen Z reporting a run over the past year. As people entering the job market engage in alternative jobs, while individuals who retire from the workforce leave traditional jobs behind, the shift in employment types should not be surprised or shocked. Instead, we should track and incorporate these changes into our thinking and analysis. Although unconventional jobs may be non-traditional, they are still real jobs with significant economic implications.
Jeff Stibel
Traditional labor statistics are based on outdated employment models. As the nature of work changes, we need more modern ways to accurately assess the true health of the economy. A more complete measure will integrate multiple data sources, including new business registrations and free platform activities, in addition to investigating larger businesses and families. As the palette expands, we can depict more accurately the dynamics of modern labor.
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