Weekly Economic Update: October 9 – October 13, 2017

October 10, 2017

CHART OF THE WEEK

Declining Entrepreneurship

Leading up to the recession that began in 2007, the business startup rate dropped precipitously from 10.8% in 2006 to 7.8% by 2010, and averaged only about 8% since then. The Census Bureau recently reported that there were 414,000 new businesses in 2015. A recent Economic Innovation Group (EIG) study estimated that U.S. startups averaged 511,000 per year between 2000 and 2006. An earlier EIG study (p. 29), found that each new business creates an average of six new jobs. In 2015 alone, the missing startups translate to 600,000 missing jobs.

Last week’s JEC hearing examined how pro-growth tax reform could help to increase new business formation in America.

LAST WEEK

Category	September	August	July
Nonfarm payroll jobs (thousands)	-33	169	138
Headline unemployment rate (U-3)	4.2%	4.4%	4.3%
“True” unemployment rate (U-6)	8.3%	8.6%	8.6%

Employment Situation 101017

Noteworthy: BLS’s establishment survey, which does not count employees who did not work during the week the survey is conducted (the week Hurricane Irma made landfall) as employed, reported that 33,000 nonfarm payroll jobs were lost in September. The household survey, which is less sensitive to extreme weather effects, reported that the headline unemployment rate (U-3) was the lowest since February 2001 and the “real” unemployment rate (U-6) was the lowest since June 2007 (6 months before the last recession began).