Despite last week’s headlines about alarmingly soft job growth, millions of Americans have been starting businesses at unprecedented rates. This trend started in 2020 during the COVID-19 pandemic and is still holding strong. However the shift is not accounted for in traditional labor statistics, which focus exclusively on W-2 payroll jobs. New business formation is a vital piece of the business landscape of the United States and can counteract the economic impact of a slowdown of traditional job creation.
Job growth numbers from the Bureau of Labor Statistics (BLS) miss this point, highlighted by the most recent data: The economy appears to have added only 73,000 jobs in July 2025, significantly less than expected and not enough to keep up with population growth. Adding to the concern, the BLS drastically revised May and June numbers, reporting that the economy grew 258,000 fewer jobs during those months than was previously stated.
Traditional labor statistics are built on outdated employment models. As the nature of work changes, we need more modern methods to accurately assess the true health of the economy. A more complete measure would integrate a diversity of data sources, including new business registrations and freelance platform activity, in addition to polling larger businesses and households. With an expanded palette, we could color a more accurate picture of modern labor dynamics.
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