Businesses are launching at a fast clip in 2026, with millions of businesses having launched in the first five months of the year alone. But the real question is how many of these businesses will survive and how many will still be operating next year? The latest official data from the US Census Bureau show 523,971 seasonally adjusted business applications in May 2026, up 3.7% from April, according to the bureau’s Business Formation Statistics released on June 10, 2026. This shows that more Americans are trying to build businesses amid the current uncertain job market.
What Business Formation Data Really Shows
It is important to note that the Census Bureau is measuring business applications for an EIN, and not guaranteed operating companies. Its own release says the projected number of employer startups from the May cohort is 29,493 within four quarters. This means that a large number of business filings have never become payroll-tax-paying employers.
Nevertheless, third-party tracking has pushed the optimism even further. In a June 22 post, Stripe Economics argued that the US may be entering “the age of the solopreneur,” citing evidence that recent sign-up cohorts are reaching meaningful revenue faster than earlier cohorts. Marginal Revolution also noted that through the month of May, roughly 2.9 million new firms had been formed nationwide in 2026 based on registered-agent and incorporation data.
That is not the same as Census BFS applications, but it does mean that entrepreneurship is becoming a more popular choice, going by the numbers from both platforms. Data from the Federal Reserve Bank of St. Louis FRED series also shows that business applications remained elevated into spring 2026, with April numbers sitting at 503,171 before the May increase.
The Census Bureau’s Business Formation Statistics are usually the better metric since they separate filing activity from actual employer creation. The agency says business applications are filings for tax IDs through the IRS Form SS-4, while formations are companies that eventually show up with payroll tax liabilities. In other words, a business application can represent anything from a side hustle to an ambitious startup to a low-cost LLC formed for legal or tax reasons. So, it’s not all large, structured businesses as many people might believe.
While the rise in entrepreneurship has grown, this is not a recent development. The uptick began following the COVID pandemic and has grown from there. The US saw a major jump in business applications during 2020 and 2021, and even after that initial burst faded, the baseline still stayed higher than it was before the pandemic. Census historical releases show the trend has not fully reverted to pre-2020 norms, which suggests a structural shift rather than a short-lived spike happened post-pandemic.
Can These Businesses Survive The First Year?
The first year of business is where the numbers usually separate hope from reality. Many new businesses fail because they are undercapitalized, misprice products, underestimate taxes, or never find repeat customers. Others survive as non-employer operations, meaning they morph into consultants, contractors, resellers, freelancers, and one-person service firms.
There is also a market-context angle when it comes to figuring out how many businesses might survive. Higher interest rates and tighter credit conditions can make it harder for newer businesses to borrow, while inflation makes it more expensive to stock inventory, lease space, or hire help.
This combination may be why the current wave looks different from older startup booms. Some founders are building high-growth companies. Others are building income bridges. Both count as businesses. However, only one category tends to show up quickly in payroll data.