I've seen this a lot since COVID-2020. The notion that people must be optimistic about the economy since they are starting new businesses at record pace.
Roger Lowenstein wrote an op-ed in the Journal about American exceptionalism. He says last year one out of every 24 household registered a new business application. You don’t start a new buisness if you’re worried about the future or hard work.
Look at this chart:
New business applications have exploded since the pandemic while sentiment has dropped to the floor.
Which one should we trust more — people’s feelings or their actions?
I suspect there are a couple things going on here instead of just "confidence in the economy".
First, the spike in new businesses right after COVID. This could have been workers who had been laid-off starting businesses of their own just trying to pay the bills. They certainly weren't optimistic at that time. Another likely cause is a lot of LLCs were formed just to scam some of the free COVID money the Trump Administration was throwing around.
My guess is the continued increase after 2021 is due to working people discovering that single person LLCs are a great way to lower your taxes and remove liability from any business. Do the same thing you were doing but inside an LLC and get away with more money and no liability.
I think these have a much better chance of being true than that people are just so confident in the economy.
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