At a glance
New business formation is running hot. Applications are up 15.6% over the past year and sit 68.6% above their level at the end of 2019. The subset most likely to hire employees is up too, by 5.2%.
The surge is led by solopreneurs, and they are increasingly launching with AI. 60% of new owners used AI to help start their business in 2025, double the rate of two years earlier.
Small business hiring has been positive for five straight months (February through June), and the national jobs numbers tell the same story.
Consumers are still spending, but inflation is doing most of the work. After accounting for prices, real spending is up only about 2.1% over the year, and confidence sits near record lows.
Growth re-accelerated early in 2026. It is worth watching, not counting on.
A founders' boom, led by solopreneurs
Let's start with the most striking number. Americans filed 531,423 business applications in June, up 15.6% over the past year, and applications now run 68.6% above where they sat at the end of 2019. Entrepreneurship growth has compounded in recent years.
The industry detail makes the split concrete. The fastest growth in total applications is concentrated where new businesses are most easily one-person operations: information (up 44.6%, though likely-employer filings there only rose 4.7%), professional and technical services (up 30.8%), educational services (up 19.2%), and real estate (up 24.2%). Where likely-employer formation is strong, it shows up in a different set of sectors, the trades and care work: construction (up 16.3%, with likely-employer filings up 13.4%), health care (up 14.6% and 7.2%), and accommodation and food services (up 17.3%, almost all of it likely-employer).
The story underneath is the solopreneur. Gusto's research finds that solopreneurs now power a hidden $72 billion economy in payments to contractors each year, and more than four in ten of them pay at least one contractor. A solopreneur is rarely a payroll client, but many are active buyers of services, which is its own kind of opportunity.
Part of why starting up has gotten easier is AI. In Gusto's 2026 New Business Formation report, 60% of new owners said they used AI to help launch in 2025, double the share of two years earlier, and half said it made the process faster or cheaper. AI looks like an accelerator rather than the reason people start: only 3% said they likely would not have launched without it.
What this means for your clients: The clients most likely to need payroll, benefits, and ongoing accounting are the likely employer founders in the trades and care work. The solopreneur wave is real and worth serving too, with a different mix weighted toward entity setup, bookkeeping, and the contractor payments many of them are already making.
Hiring is steady, and it's happening across industries
Two numbers tell the story: total applications and likely employer applications. Total applications count everyone filing to start a business. A second measure, likely employers, counts the ones carrying the markers of a future employer, and those rose 5.2% over the year. The distance between 15.6% and 5.2% is not employers falling behind. It mostly reflects who is filing, a wave of one-person businesses, and how the Census defines that likely employer group. Both are growing, just at different speeds.
Small businesses kept adding workers in May and June. According to Gusto's Small Business Jobs Report, which looks at job growth in businesses with fewer than 50 employees, the small business economy added 32,868 new jobs in June. After a weak January, hiring has stayed positive for five straight months, and the national numbers tell the same story.
The national numbers agree: the total economy added 57,000 jobs in June and unemployment fell to 4.2%. When the small business data and the national data point the same way, the read is more reliable.
What this means for your clients: A client who has kept a role open waiting for a clear signal can stop waiting. Hiring is quietly positive, wage growth is predictable near 3.4%, and the steadiness is a planning advantage.
Consumer spending continues to grow, but slows due to inflation
Now the uncomfortable part. Consumer spending grew at an inflation adjusted 2.1% over the past year, and 6.3% in non-inflation adjusted dollars. This means that Americans are spending more dollars, but not buying much more.
It shows up in how people feel. Consumer sentiment sits near record lows. That gap between what people spend and how they feel has persisted for over a year now. Spending is now split by income, with higher-income households still spending freely while middle-income households are squeezing more life out of every dollar.
There is one brighter signal, with a caveat. Overall economic growth re-accelerated: real GDP grew at a 2.1% annual rate in the first quarter of 2026, up from 0.5% at the end of 2025. An economy that is growing quicker is one where we expect to see spending, savings, and earnings pick up. That would be welcome, but a single quarter is not a trend, and with inflation still above the Fed's target and the federal funds rate at 3.63%, it is something to watch rather than count on.
What this means for your clients: the right advice for your clients depends on who their customers are. A client selling to higher-income households can plan for steadier demand. A client serving middle- and lower-income customers should expect price sensitivity and trading down, and should be cautious about raising prices to chase inflation, since those customers are already stretched. Help them read the growth and inflation signals together before committing to a big move.
The bottom line
Sort your new clients by the type of businesses their building: employer or solopreneurs. Point construction and health-care founders toward payroll and benefits early; serve solopreneurs with setup, bookkeeping, and contractor-payment help.
Tell clients waiting that the signal to hire has arrived. Hiring is steadily positive and pay growth is predictable near 3.4%, so a planned hire can be budgeted with confidence.
Anchor spending advice to the client's customer base. Real spending is soft and split by income, so the economy a client feels depends on who they sell to. High income people are still spending, while people with lower incomes are pulling back. If your clients’ customers are primarily the latter they should plan for decreases in revenue now.
The numbers this quarter are busy and a little contradictory. New businesses are forming fast, hiring is holding, and consumers keep spending even as inflation eats into it. Your job is helping each client see which of these forces shapes their business, and make the next decision with a clear head.
This material is for general informational purposes only and is not tax, legal, financial, accounting, or HR advice. Encourage your clients to consult the appropriate licensed professional about their specific situation.
