New Business Applications Drop in January

Business applications fell 14% in January compared to December 2024, with 392,496 new applications filed, according to U.S. Census Bureau data released February 12.

The decline affected all major categories: high-propensity business applications decreased 11.3%, applications with planned wages dropped 11.1%, and corporate applications fell 8.6%. The Census Bureau noted the decrease was partially impacted by a scheduled IRS system outage between December 27, 2024 and January 2, 2025.

Projected business formations also declined, with the Census Bureau forecasting 24,574 new employer businesses will form within 4 quarters from January's applications - a 14.3% decrease from December's projections.

Retail trade led all sectors with 64,858 applications, followed by professional services with 52,907. The utilities sector saw the steepest decline at 28.4% compared to December.

The report shows decreases across all U.S. regions, with the Midwest experiencing the largest drop at 16.2%, while the West showed the smallest decline at 12.3%.