The hurtling juggernaut that was the nonemployer business population explosion came close to a screeching halt in 2006, according to data released last week by the U.S. Census Bureau. The number of nonemployer businesses — defined as U.S. firms with no paid employees outside the business owner(s) — crept up by just under 2% in 2006, going from 20.4 million to 20.8 million firms. Overall nonemployer receipts also grew by roughly 2%, bringing them to $970 billion, or 7.4% of the sprawling $13 trillion U.S. economy.

As a general matter, the population of U.S. firms grows by between 2% and 3% per year, so the 2006 increase in nonemployer businesses might be considered normal. However, in light of the precedent set during the period from 2002 through 2005, when nonemployers were growing by an average of 4.5% per year, the drop in growth rate was as unexpected as it was sudden. Clearly, further research is needed in order to understand these gyrations in the nonemployer population. Whether any of the interested parties will undertake that research remains to be seen.