Projected Business Formations: 29,863 in Jan 2026
Projected Formations at 29,863 in Jan 2026. Up 37.6% year-over-year.
Projected Formations -- Historical Chart
Projected Business Formations. Gray shaded areas indicate U.S. recessions.
Source: Federal Reserve Bank of St. Louis (FRED), Series BFPBF4QTOTALSAUS. Updated 2026-03-09.
What the Jan 2026 Data Shows
At 29,863, projected formations in Jan 2026 is above the 10-year average of 23,372 by 6,491. The reading has been mixed recently, fluctuating without a clear directional trend over the past 6 months.
Actual business formations take 12-15 months to confirm because the Census Bureau must wait for payroll tax data. The projected formations series bridges that gap by applying historical conversion models to recent applications, generating an estimate of how many will become employer businesses.
The projection model uses the characteristics of each application (industry, legal form, state, high-propensity flag) to estimate conversion probability. It has been reasonably accurate historically, though the unprecedented post-2020 application surge introduced more uncertainty into the model.
Series BFPBF4QTOTALSAUS is reported quarterly and provides a near-real-time view of business formation momentum that the actual formations data cannot.
What This Metric Measures
This page tracks the Census Bureau's forward-looking estimate of how many recent business applications will result in employer businesses within four quarters, based on historical conversion rates and application characteristics. The data comes from the Federal Reserve Bank of St. Louis FRED database, series BFPBF4QTOTALSAUS, updated quarterly.
Historical Context
The all-time peak was 31,923 in Dec 2006. The all-time trough was 14,012 in Apr 2020. During COVID-19, the reading hit 27,592 (Jul 2020). Year-over-year, the metric has moved +37.6%.
Why It Matters
If you are sizing a market for small business products, the projected formations number gives you the best available estimate of how many new employer businesses will exist 12 months from now. Each one will need a bank account, insurance, possibly an SBA loan, and eventually a CPA. The number also serves as an early warning system: a sharp drop in projected formations signals that the startup pipeline is drying up, which has downstream effects on job creation and economic growth.
What This Means for Business Owners
Understanding where this metric stands relative to historical norms helps business owners make better borrowing decisions. When projected formations is above its 10-year average, it signals changing conditions in the credit markets that affect both cost and availability of financing.
Projected Formations -- Frequently Asked Questions
The Census Bureau uses a statistical model to predict how many recent EIN applications will convert into actual employer businesses within four quarters. The projection is based on historical conversion rates by application type, industry, and state.
Pre-2020, the model tracked actual formations closely. The post-pandemic application surge introduced more variance because the composition of applicants changed. The Census Bureau has been updating its models to account for the structural shift in application patterns.
The current projection is 29,863 for Jan 2026. This represents the Census Bureau's best estimate of how many recently filed applications will become employer businesses with payroll within one year.
Applications include many filings that will never become real businesses. Projections filter through a conversion model to estimate actual employer businesses. For economic planning and lending market analysis, projected formations are far more useful than raw application counts.
Each projected employer formation represents a business that will hire at least one employee. In aggregate, new employer businesses account for a significant share of net new job creation. Rising projections suggest continued labor demand from the startup sector.
FRED series BFPBF4QTOTALSAUS from the Census Bureau's Business Formation Statistics program. The projections use the same EIN application data as the actual formations series but apply a predictive model rather than waiting for confirmed payroll records.