Business applications fell 7.8% in August
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Americans filed 531,728 applications to start a business in August, seasonally adjusted, the Census Bureau reported September 11. That is 7.8 percent below July, and it is also the highest August total since the bureau's records begin in 2004.
July was the outlier. Applications jumped to 576,512 that month, and nearly all of the August decline came from the same place the July spike did. Retail applications fell 26.0 percent to 104,087. Every other major sector moved by less than 11 percent, and most moved by less than 3.
| August | Business applications |
|---|---|
| 2004 | 190,755 |
| 2015 | 234,217 |
| 2019 | 292,063 |
| 2020 | 484,772 |
| 2023 | 467,208 |
| 2025 | 477,409 |
| 2026 | 531,728 |
Compared with August 2025, applications are up 11.4 percent. Compared with August 2019, before the pandemic surge in new businesses, they are up 82 percent. Through the first eight months of 2026, Americans filed 4,345,310 applications on an unadjusted basis, 13.5 percent more than the same months last year.
The drop hit the applications least likely to hire
The bureau separates out high-propensity applications, the ones with characteristics that make them likely to become businesses with a payroll, such as a planned hiring date or a corporate structure. Those fell 4.1 percent in August to 145,387 and made up 27.3 percent of all filings. The remaining applications, which include sole proprietors and online sellers who may never hire anyone, fell 9.1 percent.
Projected formations followed the smaller number. The bureau estimates that 28,501 employer businesses will form within four quarters from August's applications, down 4.6 percent from July. About 5.4 percent of all applications are projected to become businesses with employees within a year.
Applications with planned wages fell to 34,263, continuing a slide that began in January from 39,077. Corporate applications fell to 41,075.
Where the growth is
Over the year, the fastest growth came in sectors that require little physical space to start. Information businesses rose 37.4 percent from August 2025, professional, scientific, and technical services 25.2 percent, and manufacturing 24.8 percent. Professional services now accounts for 80,691 monthly applications, second only to retail.
By state, Mississippi posted the largest year-over-year increase among states with at least 3,000 applications, up 31.1 percent. Colorado was up 30.6 percent, Idaho 29.6 percent, Kentucky 28.7 percent, and California 26.0 percent.
Florida led all states in volume with 61,380 applications, followed by California at 55,619 and Texas at 48,692. South Carolina was the only large state with a meaningful decline, down 7.4 percent from a year earlier, and North Carolina was down 2.6 percent.
Our coverage of the July figures is in July business formation statistics. The share of Americans already working for themselves is covered in the counties with the most self-employed workers. The September report is scheduled for mid-October.
Sources
Figures are from the U.S. Census Bureau Business Formation Statistics for August 2026 (CB26-148, released September 11, 2026), developed with economists from the Federal Reserve Board, the Federal Reserve Bank of Atlanta, the University of Maryland, and the University of Notre Dame. Monthly, sector, and state comparisons use seasonally adjusted series; the year-to-date total uses unadjusted applications. High-propensity applications are series BA_HBA, applications with planned wages BA_WBA, corporate applications BA_CBA, and projected formations within four quarters BF_PBF4Q. Business applications are counted from filings for an Employer Identification Number with the IRS, and not every application becomes an operating business.
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How many business applications were filed in August 2026?
531,728 on a seasonally adjusted basis, according to the Census Bureau's Business Formation Statistics. That is 7.8 percent below July's 576,512 but 11.4 percent above August 2025, and the highest August total in records going back to 2004. Through the first eight months of 2026, unadjusted applications totaled 4,345,310.
Why did business applications drop in August 2026?
Mostly because of retail. July's total had spiked, and retail applications fell 26.0 percent in August to 104,087. Most other sectors changed by less than 3 percent. High-propensity applications, those most likely to hire employees, fell only 4.1 percent, while the remaining applications fell 9.1 percent.
How many new businesses will actually form?
The Census Bureau projects that 28,501 businesses with payroll will form within four quarters from August's applications, down 4.6 percent from July. That is about 5.4 percent of all applications filed. Many applicants are sole proprietors or sellers who never hire employees, so most applications do not become employer businesses.
