The pace at which new businesses are created in the United States dropped to a record low in 2010, a troubling development for an economy that is struggling to achieve higher growth rates necessary to reduce high unemployment.
By Lucia Mutikani at Reuters
The latest Census Bureau data, published on Wednesday, showed the startup rate fell to an all-time low of 7.87 percent from 8.10 in 2009.
The startup rate peaked at 13.02 percent in 1987. Startups are critical contributors to job creation, and the declining trend could help explain the economy’s sluggish recovery from the 2007-09 recession.
According to the survey, about 394,000 new businesses were formed in 2010, creating 2.3 million jobs. In contrast, total private-sector employment fell by 1.8 million between March 2009 and March 2010.
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