U.S. Business Creation Hits Record High

However the President may describe it, there’s no denying the good news.

By James Freeman

Sept. 11, 2018 6:50 p.m. ET

President Donald Trump talks to reporters aboard Air Force One on Friday. PHOTO:SUSAN WALSH/ASSOCIATED PRESS

Perhaps the Beltway press corps will someday acknowledge that the health of the economy is more important than the President’s Twitter commentary about the economy. In the meantime, reporters should take note as business creation reaches the highest level ever recorded in the United States.

.@FreemanWSJ on the economy: "The huge boom in business investment... I think that's what tells you it's not a sugar high. When companies make those investments, they buy new equipment, that's fuel for our economy that's used for years to come."

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White House Council of Economic Advisers Chairman Kevin Hassett highlighted this extremely  encouraging trend  at a Monday press briefing. Mr. Hassett  first described for reporters why it's important and how his team measures such things:

Now, one of the things that I can remember at the American Enterprise Institute talking a lot about before I came in here was the fact that entrepreneurship in America was falling off. And one of the ways we can measure entrepreneurship is that, if you start a new business, that you have to apply for an ID number — a tax ID number — for your business.

The government has been tracking these data since the third quarter of 2004, and the recent trend is striking. The 876,201 new business applications in the second quarter of 2018 were the most ever recorded. In fact, the totals for each of the six quarters in which Donald Trump has been in the White House are higher than for each of the quarters from the start of the series through the end of 2016. The quarterly total in the pre-Trump era had never reached 800,000 and the U.S. has now been fortunate enough to exceed that total for three straight quarters. There’s no guarantee that Mr. Trump won’t describe such results inaccurately on Twitter. Regardless, the results are better than they have ever been.

On Monday Mr. Hassett shared with journalists the reaction of White House Press Secretary Sarah Sanders when he showed her a chart showing new applications rising well above the Obama-era trend:

And, you know, Sarah... is a calculus geek. And so she looked at that one, and said, “Jeez, that looks like a very strong second derivative to me.” And then, I said, “I didn’t know you did calculus.” And she said, “I like calculus better than talking to these guys.”

Kimberley Strassel

?@KimStrassel

One amusing aspect of the flap over Trump's comments about last time GDP was higher than unemployment rate: Whether it is 12 years or 100 years, it still never happened under Obama.

Of course one doesn’t need to enjoy calculus to prefer it to fielding questions from White House correspondents. This week journalists have been having fun pretending that the biggest story in economics is the President incorrectly tweeting that the rate of economic growth is higher than the unemployment rate for the first time in more than a century. In fact it’s only the first time since 2006. And it is very good news.