Number of businesses

In 2025, the number of businesses in the United States is estimated to reach 8.6 million, following a period of moderate expansion. Growth has persisted despite macroeconomic headwinds, but a gradual slowdown in the annual growth rate is evident. For the current year, business formation is supported by ongoing, though softening, consumer spending and continued, if uneven, economic recovery following the 2020 pandemic shock. However, inflationary pressures in 2025 are dampening consumer confidence, which may restrain the opening of new businesses, particularly among small firms sensitive to cost increases. The current climate also reflects a cautious investment environment, with business owners wary of rising operating expenses and financing costs.

Over the five years through 2025, the number of businesses in the United States increased at an estimated annualized rate of 1.5%. Growth sharply rebounded beginning in 2021, following the significant contraction in 2020 caused by the COVID-19 pandemic. The pandemic prompted widespread business closures and suppressed new business formation due to mandatory shutdowns, restricted mobility, and a collapse in consumer spending. Numerous businesses closed on a permanent basis, particularly in service sectors highly impacted by physical distancing requirements. However, the US economy experienced a rapid recovery in 2021, driven by pent-up consumer demand and substantial government stimulus. This enabled a strong uptick in new business formation and aided existing businesses in stabilizing or expanding operations. These positive trends continued into 2022 and 2023, although the pace of growth moderated as inflation accelerated and pandemic-era stimulus measures expired.

Macroeconomic factors such as tight labor markets, changing consumer behavior, and evolving credit conditions played a key role in shaping the business environment during this period. Access to affordable credit improved gradually following the initial shocks of 2020, supporting business formation, but rising interest rates and inflation in later years introduced new risks for business sustainability and growth. Digital transformation intensified as businesses increasingly adopted e-commerce and remote work models to adapt to new market realities, creating opportunities for some sectors while challenging traditional business models.

From 2021 to 2025, improvements in private investment, gradual normalization in supply chains, and relative stability in broader economic indicators supported the ongoing, if moderate, growth in the number of businesses. Nonetheless, continued cost pressures, including wage growth and input price volatility, tempered the pace of new business openings, particularly among startups and small enterprises. Overall, the period was characterized by recovery from a deep contraction, adaptation to evolving consumer and market dynamics, and moderate business creation.