When compared to a decade ago, newly formed businesses are adding jobs at a slower pace today, reports The Wall Street Journal.
New businesses created 7% fewer jobs from the fourth quarter of 2014 to the first quarter of 2015 on a seasonally adjusted basis, according to the Labor Department. That figure is down 18% from a decade ago.
The number of job losses due to business closures is also down 21% from 2005, indicating that there is less risk-taking, and possibly innovation, occurring in the economy. The trend is a concern for one of President Barack Obama’s top economic advisers.
“Look at the rate of new-business formation, that’s fallen for a couple decades in a row,” Jason Furman, chairman of the Council of Economic Advisers, said Tuesday at The Wall Street Journal CEO Council annual meeting. Fewer and slower-growing startups limit the ability of new businesses to invent new products and services that could serve as boon for future economic growth.