In this Wednesday, Oct. 17, 2012, photo, a sign advertising a sale is seen posted on a storefront in Philadelphia. A flurry of reports released Thursday, Nov. 1, 2012, showed that U.S. consumers are growing more confident and spending more, boosting a still-weak economy just five days before the presidential election. Consumer confidence surged in October to its highest level in nearly five years. Americans were encouraged by recent declines in the unemployment rate. And they responded by spending more on cars and trucks, at retail businesses and on goods produced at U.S. factories. (AP Photo/Matt Rourke)
NEW YORK (AP) — The slow improvement in the economy gave a huge boost to entrepreneurship in the U.S. last year, according to a study released Thursday.
More than 29 million people were starting or running new businesses in 2011, the study by Babson College in Wellesley, Mass., and Baruch College in New York shows. That was a 60 percent gain from 2010, when entrepreneurship was hurt by uncertainty about the economy.
The gain also matched the increase in entrepreneurship recorded in 2005, when the economy and small businesses were booming.
A pickup in entrepreneurship indicates that people were getting more confident about the economy and were therefore willing to take a chance on starting a business. However, it also reflects a still-weak job market: Many people chose to start companies because they couldn't find jobs or were tired of looking.
Still, researchers at the colleges say the report's findings are a positive sign for the economy. They found that nearly 40 percent of the entrepreneurs they counted expected to create more than five new jobs each in the next five years. Many economists have said the economy can't gain momentum unless small businesses pick up the pace of their hiring.
The economy has been showing signs of a slow but steady recovery, led by an improving housing market and greater consumer confidence. Next week will bring several new reports, including the government's look at the job market in November.