Job seekers increasingly start a business

Aug. 15, 2013 at 3:56 PM
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CHICAGO, Aug. 15 (UPI) -- U.S. job seekers turned increasingly toward creation of their own business in the first half of the year, a private employment firm said Thursday.

Outplacement firm Challenger, Gray & Christmas said an average of 4.1 percent of out-of-work managers and executives started their own companies in each of the first two quarters of the year, a 3 percent gain over the first half of 2012.

The fourth-quarter moving average of job seekers starting a company rose to 4.8 percent in the first half of the year. After the first two quarters of 2012, the moving average was 3.1 percent, the firm said.

The increase indicates out-of-work adults, although not often willing to take the risk of starting a company, are increasingly willing to do so for two reasons, Challenger, Gray & Christmas said -- an increase in job opportunities as a fall-back position, if needed, and increased opportunities to secure credit.

The National Federation of Independent Business found in a survey that nearly 50 percent of firms with fewer than five employees did not apply for a business loan in 2009, fearing the loan would not be approved.

For a variety of reasons, a far smaller percentage of job seekers are starting companies than in the recovery from the 2001 recession.

During the 2001 recession, 7.8 percent of job seekers began their own companies. In the four quarters following the 2001 recession, 9.6 percent of job seekers started a business, Challenger, Gray & Christmas said.

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