American workers aren't waiting for a rescue.
Faced with stubborn inflation, soaring energy costs, and wages that won't stretch, hundreds of thousands are building their own escape hatches—registering new businesses at a pace never seen before.
March shattered records with 624,915 new business formations, the highest monthly total on record, according to Registered Agents, the nation's largest business formation services provider. April kept the momentum with 560,194 registrations—a 9% jump from the same month last year.
The surge comes as household budgets buckle. April's consumer price index climbed 3.8% year-over-year, with energy costs biting particularly hard amid ongoing Middle East tensions choking global oil and gas supplies.
The pain is personal—and political. "Since President Trump took office, coffee prices have risen 24%, beef over 19%, gasoline over 19%, and vegetables 10.5%," noted UBS economist Paul Donovan. "These are price increases consumers notice and remember."
They certainly remember. The University of Michigan's May consumer sentiment survey hit 48.2—a record low matching the depths of June 2022.
So workers are improvising. "We are witnessing a profound shift in the American workforce," said Molly Cavanah, Registered Agents' VP of revenue growth and data. "This growth is driven by 'under-employed' Americans building side hustles to bridge the gap between rising costs and stagnant income."
The trend predates the latest inflation spike. Even before the Iran crisis sent gas prices climbing, a KeyBank survey found 35% of more than 1,000 respondents were already running side hustles just to pay bills.
Geographically, Florida led March registrations with more than 67,000 new entities, followed by Texas (47,348), California (40,399), and Delaware (28,882).
The Optimism Gap
Curiously, the entrepreneurs themselves aren't gloomy. Despite cratered consumer confidence, business owners see blue sky: 46% told Registered Agents their companies are stronger than a year ago, and 54% expressed strong optimism for the next 12 months.
That nascent confidence tracks with broader measures. The OECD's May business sentiment index ticked up 0.06%—modest, but a reversal from 2025's negative readings. The Conference Board's quarterly CEO Confidence report jumped 11 points from late 2025 to breach the 50 threshold separating optimism from pessimism.
The message is clear: When the economy fails workers, they're increasingly choosing to build their own.
Americans Are More Economically Pessimistic Than Ever. Here's Why.
Americans' economic despair is reaching historic depths.
By one measure, public sentiment has never been darker in the postwar era. The University of Michigan has tracked consumer confidence since 1952, and last month's reading was the lowest in the survey's entire history.
A CNN poll this week laid bare a crisis of faith in the American dream itself. Asked whether hard work still leads to getting ahead, 47 percent of respondents said yes. In 2016, 67 percent did. That 20-point collapse cut across age, race, and gender lines.
President Trump's economic approval ratings have similarly cratered, hitting all-time lows in polls from both CNBC (39 percent) and CNN (30 percent).
What makes this so striking is the backdrop: GDP growth is holding up, job numbers look solid, and the stock market sits near record highs. By traditional measures, the economy isn't in bad shape. Yet the public mood is historically grim.
The reason, consistently, is the cost of living. In CNN's open-ended survey question, 76 percent of respondents pointed to some version of affordability as their family's biggest economic problem.
And recent data suggests things are getting worse, not better. New figures show inflation at a three-year high — driven partly by rising energy costs tied to the Iran war, but not entirely. For the first time in three years, inflation is outpacing wage growth. Meanwhile, wholesale prices rose at their fastest pace since 2022, a typical early warning sign of higher consumer prices ahead.
A puzzle economists can't quite crack
Prolonged economic anxiety over high prices is hardly surprising. What puzzles many economists is its sheer intensity — and its timing.
Inflation in the 1970s was far more severe and lasted far longer than anything in the 2020s. Yet it's now, not then, that consumer sentiment has hit an all-time low. Traditionally, sentiment tracks hard economic data fairly closely. In this decade, that relationship has broken down.
The explanation isn't social media negativity or political polarization, either. Both of those were very much present in the mid-to-late 2010s — a period when Americans actually felt quite good about the economy, with the Michigan sentiment index routinely in the nineties.
The great betrayal
A new paper by economists Jared Bernstein and Daniel Posthumus offers what may be the most compelling explanation yet. They call it the "vibe gap" — and it comes down to broken expectations.
After the Federal Reserve tamed the inflation of the late 1970s and early 1980s, prices rose slowly and predictably for roughly four decades. That long stretch of stability became the only economic reality most Americans had ever known. As Bernstein and Posthumus point out, no one under 43 in 2022 had ever lived through inflation above 7.5 percent as an active economic participant.
When prices suddenly surged in the 2020s, the shock wasn't just financial. It felt like a violation of the natural order — a sign that something fundamental had broken. When Bernstein and Posthumus incorporated consumers' long-term price expectations into their economic model, it predicted recent sentiment far more accurately than standard models do.
In other words, Americans aren't just reacting to higher prices. They're reacting to the collapse of a decades-long promise.
And with inflation ticking back up, that promise looks no closer to being kept.