Summary:
Millions of Americans are starting businesses at unprecedented rates, a trend that began during the COVID-19 pandemic.
Traditional labor statistics miss the mark by focusing solely on W-2 payroll jobs, ignoring the surge in entrepreneurship.
AI-driven tools are lowering barriers to entry, enabling more people to launch businesses with minimal capital or experience.
51% of Americans have a side hustle, with Gen Z leading at 72%, highlighting the shift towards alternative employment.
The need for modern labor metrics that include new business formations and freelance activity to accurately assess economic health.
Despite recent headlines highlighting alarmingly soft job growth, millions of Americans are turning to entrepreneurship at unprecedented rates. This surge, which began during the COVID-19 pandemic in 2020, continues to thrive, yet it's largely overlooked by traditional labor statistics focused solely on W-2 payroll jobs. New business formation is a critical component of the U.S. economy, offering a counterbalance to the slowdown in traditional job creation.
Recent data from the Bureau of Labor Statistics (BLS) paints a grim picture, with only 73,000 jobs added in July 2025—far below expectations and insufficient to match population growth. Moreover, significant revisions to May and June figures revealed 258,000 fewer jobs than initially reported. However, this narrative misses a key piece of the puzzle: the 6.48% growth in business formations from Q1 to Q2 this year, as reported by the U.S. Census Bureau. This growth, though modest, marks a stark contrast to last year's declines and underscores the rising importance of entrepreneurship in the post-pandemic economy.
Jeff Stibel
The rise of AI-driven solopreneurship is reshaping the labor market. With tools that simplify website creation, copywriting, graphic design, and even customer acquisition, launching a business has never been more accessible. AI's role extends to market research, pricing strategies, and financial projections, lowering barriers to entry and fueling a surge in self-employment, freelancing, and side hustles. In fact, 51% of Americans reported having a side hustle in April 2025, with Gen Z leading the charge at 72%.
Jeff Stibel
Traditional labor metrics fail to capture this shift, relying on outdated models that ignore the diverse nature of modern work. A more comprehensive approach would integrate data from new business registrations and freelance platforms, alongside traditional surveys, to provide a fuller picture of economic health. As the nature of work evolves, so too must our methods for measuring it.
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