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Economics

Americans Rush to Start Businesses, Stoking Optimism for Rebound

The bounce is uneven, with the South showing particular strength.

Jen Price, founder of the Atlanta Beer Boutique.

Jen Price, founder of the Atlanta Beer Boutique.

Photographer: Nydia Blas for Bloomberg Businessweek

Amid the worst job market in decades and projections that the economy will contract by as much as 35% this quarter, entrepreneurs apparently missed the message of doom. New business formation has rebounded quickly in parts of the country, raising hopes for a stronger-than-expected recovery.

The number of Employer Identification Number (EIN) applications, which new businesses file with the IRS, tanked in mid-March as the pandemic forced most of the nation into lockdown. Filings remained low for several weeks, but they’re growing again across much of the country, led by Southern states that have been less severely affected by the coronavirus outbreak.