FOR RELEASE AT 10:00 AM EDT, AUGUST 14, 2024

BUSINESS FORMATION STATISTICS, JULY 2024
Release Number: CB24-129
Notice: The next annual update will be applied during the October 2024 monthly release, scheduled for
November 14, 2024. During the annual update, underlying NAICS codes are revised each year for the previous
five years when more accurate and detailed NAICS codes may be available from administrative sources. The
Formation series are updated annually to revise information on business formations (firm births) from theBusiness Dynamic Statistics (BDS) program. Also, seasonal factors are recomputed and applied during theannual update, resulting in revisions to our seasonally adjusted series.
Notice: After the weekly BFS release of 2024 week 34 data on August 29, 2024, weekly estimates of BFS data
will no longer be published on a weekly basis. The Census Bureau will continue to produce weekly estimates;
however, the weekly estimate files will be published as part of the Monthly BFS Release. The first monthly
release of weekly estimates will be published on September 12, 2024.

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1August 14, 2024 — The U.S. Census Bureau announced the following seasonally adjusted businessapplication and formation statistics for July 2024. The Business Application Series describe the businessapplications for tax IDs as indicated by applications for an Employer Identification Number (EIN) throughfilings of the IRS Form SS-4. The Business Formation Series describe employer business formations as
indicated by the first instance of payroll tax liabilities for the corresponding business applications.
BUSINESS APPLICATIONS
U.S. Business Applications:

JUL 2024

JUL 2024 /JUN 2024

Total
High-Propensity
With Planned Wages
From Corporations

420,802
135,465
45,12046,992-2.1%°-2.1%°-1.2%°-0.9%°

Next release: September 12, 2024(°) Statistical significance is not applicable or not measurable.
Data adjusted for seasonality.
Source: U.S. Census Bureau, Business Formation Statistics, August 14, 2024

Source: U.S. Census Bureau, Business Formation Statistics, August 14, 2024

Business Applications - At a Glance
Total
High-Propensity
With Planned Wages
From Corporations

JUL 2024
JUL 2024 / JUN 2024
JUL 2024
JUL 2024 / JUN 2024
JUL 2024
JUL 2024 / JUN 2024
JUL 2024
JUL 2024 / JUN 2024US
420,802-2.1%
135,465-2.1%
45,120-1.2%
46,992-0.9%

Northeast
63,076-0.8%
22,417
-2.0%
6,417
-2.5%
10,367-2.9%

Midwest70,463-2.9%
21,949
-0.5%
8,040
-0.2%
6,102
+5.0%

South
188,167-2.9%
57,146-3.1%
19,120-2.7%
15,580-3.0%

West99,096-0.6%
33,953-1.5%
11,543+1.5%
14,943+0.5%

Details may not equal totals due to rounding. Regions defined by Census Bureau Geography Program. Statistical significance is not applicable or not measurable.
Data adjusted for seasonality. Green Percentage changes are greater than zero (+). Red Percentage changes are less than zero (-). Z = absolute value < 0.05.

Business Applications
Business Applications for July 2024, adjusted for seasonal variation, were 420,802, a decrease of 2.1
percent compared to June 2024.

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BUSINESS FORMATIONS
U.S. Total Projected Business
Formations:

JUL 2024

JUL 2024 /JUN 2024

Within 4 Quarters

28,110-0.2%°

Within 8 Quarters

37,972-1.7%°

Next release: September 12, 2024(°) Statistical significance is not applicable or not measurable.
Spliced - Data adjusted for seasonality.
Source: U.S. Census Bureau, Business Formation Statistics, August 14, 2024

Source: U.S. Census Bureau, Business Formation Statistics, August 14, 2024

Projected Business Formations - At a GlanceWithin 4 Quarters
Within 8 QuartersJUL 2024
JUL 2024 / JUN 2024
JUL 2024
JUL 2024 / JUN 2024

US28,110-0.2%
37,972-1.7%

Northeast
4,530
-1.1%
6,135
-1.2%

Midwest
4,562
-0.1%
6,135
-0.3%

South
10,924-0.4%
14,957
-4.1%

West
8,094
+0.5%
10,745+0.9%

Details may not equal totals due to rounding. Regions defined by Census Bureau Geography Program. Statistical significance is not applicable or not measurable.
Data adjusted for seasonality. Green Percentage changes are greater than zero (+). Red Percentage changes are less than zero (-). Z = absolute value < 0.05.

Business Formations
Projected Business Formations (within 4 quarters) for July 2024, adjusted for seasonal variation, were28,110, a decrease of 0.2 percent compared to June 2024. The projected business formations are forward
looking, providing an estimate of the number of new business startups that will appear from the cohort ofbusiness applications in a given month. It does not provide an estimate of the total number of businessstartups that appeared within a specific month. In other words, the Census Bureau is projecting that
28,110 new business startups with payroll tax liabilities will form within 4 quarters of application from all
the business applications filed during July 2024. The 0.2 percent decrease indicates that for July 2024 there
will be 0.2 percent fewer businesses projected to form within 4 quarters of application, compared to theanalogous projections for June 2024.

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Statistics on actual business formations are available up to the latest quarter for which administrative data
identifies employer business startup activity based on first payroll observation, currently the fourth
quarter of 2021. Given the forward-looking nature of business formations, the Census Bureau can only
state actual business formations within 4 quarters up to December 2020, and business formations within 8
quarters up to December 2019. Projected business formations within 4 quarters start in January 2021 andprojected business formations within 8 quarters start in January 2020 and both end in July 2024. The mostrecent quarter for which administrative data on payroll is available is updated annually in the twelfth
month based on new data on actual business formations.
For more information, see the explanatory notes later in this release or visit<https://www.census.gov/econ/bfs/technicaldocumentation/methodology.html>.

Source: U.S. Census Bureau, Business Formation Statistics, August 14, 2024

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4Business Applications by Industry - At a Glance

11: Agriculture

JUL 2024
JUL 2024 / JUN 2024
JUL 2024
JUL 2024 / JUN 2024
JUL 2024
JUL 2024 / JUN 2024
JUL 2024
JUL 2024 / JUN 2024
JUL 2024
JUL 2024 / JUN 2024
JUL 2024
JUL 2024 / JUN 2024
JUL 2024
JUL 2024 / JUN 2024
JUL 2024
JUL 2024 / JUN 2024
JUL 2024
JUL 2024 / JUN 2024
JUL 2024
JUL 2024 / JUN 2024
JUL 2024
JUL 2024 / JUN 2024
JUL 2024
JUL 2024 / JUN 2024
JUL 2024
JUL 2024 / JUN 2024
JUL 2024
JUL 2024 / JUN 2024
JUL 2024
JUL 2024 / JUN 2024
JUL 2024
JUL 2024 / JUN 2024
JUL 2024
JUL 2024 / JUN 2024
JUL 2024
JUL 2024 / JUN 2024
JUL 2024
JUL 2024 / JUN 2024
JUL 2024
JUL 2024 / JUN 2024

21: Mining
22: Utilities
23: Construction
31-33: Manufacturing
42: Wholesale Trade44-45: Retail Trade
48-49: Transportation and Warehousing
51: Information
52: Finance and Insurance
53: Real Estate
54: Professional Services
55: Management of Companies
56: Administrative and Support
61: Educational Services
62: Health Care and Social Assistance
71: Arts and Entertainment
72: Accommodation and Food Services
81: Other Services
Unclassified

US
3,460
+1.3%
477
+1.1%
655
+0.3%
41,296
-5.5%
6,018
+1.2%
9,092
+1.2%
73,384-9.6%
30,332
+3.1%
7,680
+1.2%
18,527-0.8%
21,146-0.3%
57,764
Z
4,661
-1.9%
29,659
-1.4%
6,377
+5.2%
27,821+0.5%
12,509-1.0%
22,931+1.0%
34,565
Z
12,449+1.5%

Details may not equal totals due to rounding. Statistical significance is not applicable or not measurable. Data adjusted for seasonality, except for Utilities (22).
Green Percentage changes are greater than zero (+). Red Percentage changes are less than zero (-). Z = absolute value < 0.05.

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5Business Applications by Industry
The Census Bureau classifies BFS data by industry using the North American Industry Classification System(NAICS). NAICS codes are assigned using a variety of sources. A Census Bureau-developed automatedindustry-coding program first attempts to assign NAICS codes to all new EIN applications received from the
IRS. The automated industry-coding program is based on established patterns in the business name anddescriptions provided on the EIN applications. This auto-coding process assigned NAICS codes to over 80%
of all incoming EIN applications in 2020. For applications that did not receive a NAICS code during the autocoding process, BFS staff use a Census-developed machine learning algorithm to assign NAICS codes where
possible. NAICS codes are revised each year for the previous five years as part of the BFS annual updateprocess when more accurate and detailed NAICS codes may be available from the Social Security
Administration, the Bureau of Labor Statistics, and the Census Bureau's Business Register. There are asmall number of EIN applications where there is not enough information available to assign a NAICS code
through any source.
For more information on the Census Bureau automated industry-coding program, please visit<https://www.census.gov/econ/bfs/pdf/naics_improvement.pdf>. For more information on the machinelearning algorithm, please visit <https://www.census.gov/econ/bfs/pdf/beacon.pdf>.
GENERAL INFORMATIONOn May 13, 2019, the IRS implemented a change in Form SS-4 requiring a social security number (SSN) or
an individual taxpayer identification number (ITIN) for the responsible party indicated in the EIN
application. The change will prevent entities using their existing EINs to apply for additional EINs. For more
information on the requirement change, please visit <https://www.irs.gov/newsroom/irs-revises-einapplication-process-seeks-to-enhance-security>. The form field that the change applies to is not one that
the Census Bureau receives and it is not used in the analysis. As a result, we cannot necessarily draw any
conclusions on the impact of this change on BFS.
Release Schedule
The August 2024 Business Formation Statistics Report is scheduled for release on September 12, 2024.
View the full schedule in the Economic Briefing Room: <https://www.census.gov/economic-indicators/>.
Further information on BFS, including additional series and the full time span of the series listed above, canbe found at <https://www.census.gov/econ/bfs>.
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EXPLANATORY NOTESBusiness Formation Statistics (BFS) are a standard data product of the U.S. Census Bureau developed inresearch collaboration with economists affiliated with Board of Governors of the Federal Reserve System,
Federal Reserve Bank of Atlanta, University of Maryland, and University of Notre Dame.
Business Formation Statistics (BFS) provide timely and high-frequency data on business applications andemployer business formations. BFS measure business initiation activity (Business Application Series) as
indicated by applications for an Employer Identification Number (EIN) on the IRS Form SS-4. BFS also
provide information on actual and projected employer business formations (Business Formation Series)that originate from these applications, based on the record of first payroll tax liability for an EIN. In
addition, BFS contain measures of delay in business starts as indicated by the average duration between
the application for an EIN and the transition to an employer business.
BFS currently cover the period starting from July 2004 onwards at a monthly frequency. The data are
available nationally, regionally, and by individual states.
Business Application Series
These series describe the business applications for tax IDs as indicated by applications for an Employer
Identification Number (EIN) through filings of IRS Form SS-4. Business applications are presented in four
different series reflecting different subsets of the applications for an EIN. All business applications series
cover the period from July 2004 onwards.
•

Business Applications (BA): The core business applications series that correspond to a subset of
all applications for an EIN. This series includes all applications for an EIN, except for applications
for tax liens, estates, and trusts, applications outside of the 50 states and the District ofColumbia or those with no state‐county geocodes, applications with certain NAICS codes in
sector 11 (agriculture, forestry, fishing and hunting) or 92 (public administration) that have lowtransition rates, and applications in certain industries (i.e. private households, certain financial
services, civic and social organizations).

•

High-Propensity Business Applications (HBA): Business Applications (BA) that have a highpropensity of turning into businesses with payroll. The identification of high-propensity
applications is based on the characteristics of applications revealed on the IRS Form SS-4 thatare associated with a high rate of business formation. High-propensity applications include

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applications: (a) from a corporate entity, (b) that indicate they are hiring employees, (c) thatprovide a first wages-paid date (planned wages); or (d) that have a NAICS industry code inaccommodation and food services (72) or in portions of construction (237, 238), manufacturing(312, 321, 322, 332), retail (44, 452), professional, scientific, and technical services (5411,5413), educational services (6111), and health care (621, 623).
•

Business Applications with Planned Wages (WBA): High-Propensity Business Applications(HBA) that indicate a first wages‐paid date on the IRS Form SS-4. The indication of a wages-paid
date is associated with a high likelihood of transitioning into a business with payroll.

•Business Applications from Corporations (CBA): High-Propensity Business Applications (HBA)
from a corporation or personal service corporation, based on the legal form of organization
stated in the IRS Form SS-4. Similar to the WBA series, this series is important primarily because
it consists of a set of applications that have a high rate of transitioning into businesses withpayroll.

The following is a graphical representation (Venn diagram) of the relationship between the four businessapplications series (BA, HBA, WBA, CBA) and EIN applications. This graph does not represent the actual
relative sizes of different groups.

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8Business Formation Series
These series describe employer business formations as indicated by the first instance of payroll tax
liabilities for the corresponding business applications. The business formation series are forward-looking inthe sense that they measure new business formations from the month of business application in any given
quarter. Two series are provided: the first describes transitions within the next four quarters (12 months),
and the second within the next eight quarters (24 months). Payroll information is only available on aquarterly basis so it is only possible to look ahead in terms of quarters. All business formation series startin July 2004, the earliest month for which the data on business applications are available.
•

Business Formations within 4 Quarters (BF4Q): This series provides the number of employer
businesses that originate from Business Applications (BA) within four quarters from the monthof application. By definition, the end-point of this series is determined by the most recent
quarter for which the administrative data identifies employer business startup activity based on
first payroll observation.

•

Projected Business Formations within 4 Quarters (PBF4Q): The projected number of employer
businesses that originate from Business Applications (BA) within four quarters from the monthof application. The projections are based on an econometric model that generates estimates ofthe likelihood that a business application turns into an employer business. For the details of themodel, see the working paper <https://www.census.gov/library/workingpapers/2018/adrm/bfs_FEB2018.html>. The projected business formation series cover theperiod for which the actual number of business formations within 4 quarters is not yet
available. Combining the projected series with the actual business formations (the BF4Q series)
results in an up-to-date, forward-looking business formation series.

•

Spliced Business Formations within 4 Quarters (SBF4Q): This series combines (splices) BF4Q
and PBF4Q to provide the entire time series for the actual and projected business formations
within 4 quarters.

•

Business Formations within 8 Quarters (BF8Q): The number of employer businesses thatoriginate from Business Applications (BA) within eight quarters from the month of application,
similar to the BF4Q series. Again, the end-point of this series is determined by the most recent
quarter for which the administrative data identifies employer business startup activity based on

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first payroll observation.
•

Projected Business Formations within 8 Quarters (PBF8Q): The projected number of employer
businesses that originate from Business Applications (BA) within eight quarters from the monthof application, similar to the PBF4Q series. The projected business formation series cover theperiod for which the actual business formations within 8 quarters are not yet available.

•

Spliced Business Formations within 8 Quarters (SBF8Q): This series combines (splices) BF8Q
and PBF8Q to provide the entire time series for the actual and projected business formations
within 8 quarters.

•

Average Duration (in Quarters) from Business Application to Formation within 4 Quarters(DUR4Q): A measure of delay between business application and formation, measured as theaverage duration (in quarters) between the quarter in which the month of business application
falls and the quarter of business formation, conditional on business formation within four
quarters. These series span the same period as BF4Q.

•

Average Duration (in Quarters) from Business Application to Formation within 8 Quarters(DUR8Q): A measure of delay between business application and formation, similar to the
DUR4Q series. The difference is that the window for business formation is eight quarters, rather
than four. The series span the same period as BF8Q.

Description of Seasonal Adjustment
Because of strong seasonality detected in most of the business application and formation series, all series
are provided with and without seasonal adjustment. In the case of the duration series (DUR4Q and
DUR8Q), seasonality is not significant in general. Therefore, no seasonally adjusted duration series areprovided. All data, with the exception of the industry data, is seasonally adjusted at the state level andsummed to create seasonally adjusted United States total and regional data. Industry data, except for
Utilities (22), is seasonally adjusted at the national level to create adjusted United States total data.
Seasonal adjustment is performed using the X-13ARIMA-SEATS seasonal adjustment program of the US
Census Bureau. Users can implement their own seasonal adjustment methods using the unadjusted data.
Reliability of Estimates
The statistics presented in this release are based on administrative data and therefore are not subject tosampling error. There is also projection error associated with the projected business formation series. The
statistics may also be subject to non-sampling error. Non-sampling error occurs because accurate
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information cannot always be obtained. There are many potential contributors to nonsampling error –misreporting, mistakes in recording and coding responses, misinterpretation of questions, and other errorsof collection, response, coverage, or processing. Though nonsampling error is not measured directly, theCensus Bureau employs quality control procedures throughout the process to minimize this type of error.
Notes
Technical documentation for these statistics and specific recommendations for interpreting these statistics
are described on the product's webpage <https://www.census.gov/econ/bfs>.
The Census Bureau has reviewed this data product to ensure appropriate access, use, and disclosure
avoidance protection of the confidential source data (Project No. P-7515311, Disclosure Review Board(DRB) approval number: CBDRB‑FY24‑0150).
RESOURCESAPI
The Census Bureau’s application programming interface lets developers create custom apps to reach newusers and makes key demographic, socio-economic and housing statistics more accessible than everbefore.
<https://www.census.gov/data/developers.html>
FRED Mobile App
Receive the latest updates on the nation’s key economic indicators by downloading
the FRED App <https://fred.stlouisfed.org/fred-mobile/> for both Apple andAndroid devices. FRED, the signature database of the Federal Reserve Bank of St. Louis, now incorporates
the Census Bureau’s 13 economic indicators.

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11