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California Entrepreneurs Buck Trend, Keep Forming Businesses

California Entrepreneurs Buck Trend, Keep Forming Businesses

(Bloomberg) --

California, with a diversified economy heavy on agriculture, technology and entertainment, may prove more resilient than much of the country at weathering fallout from the coronavirus pandemic.

It’s the only state to report an increase so far this year in the number of new business applications compared with the same period of 2019, according to U.S. Census Bureau business formation data.

The hardest hit was Rhode Island, with a nearly 30% plunge in the year to date, while Wyoming, Washington, Florida, Georgia, South Carolina, Minnesota and Ohio were all down less than 5%. Applications nationwide tumbled 21% to 58,900 for the week ending April 11 compared with the same week last year, Census Bureau data show.

California Entrepreneurs Buck Trend, Keep Forming Businesses

Meanwhile, California’s non-farm payroll jobs are still up by 150,400 this year despite recording the nation’s biggest payroll decline in March; that effectively ended the state’s record 120-month year-over-year expansion.

Despite business formation remaining positive, California Governor Gavin Newsom acknowledged that “the impact has been particularly devastating for California’s small businesses” last week.

The governor created a new task force which includes former Federal Reserve Chair Janet Yellen, former head of the Small Business Administration Aida Álvarez and Apple Chief Executive Officer Tim Cook to work toward a plan to help the California economy.

The Census Bureau released national data on a weekly basis for the first time last week. Due to “overwhelming” demand, it also expanded to a state-level weekly series this week to help guage the effects of the pandemic on the entrepreneurial economy.

©2020 Bloomberg L.P.