US business formation soared 77 per cent in the third quarter, hitting the highest level on record despite the coronavirus pandemic, according to government data released on Wednesday.

Applications for tax identification numbers surged to 1.6 million in the period from July to September, the highest posted since the government began keeping records in 2004, the Commerce Department said.

The biggest increases were in the country’s Northeast and Midwest, while the West lagged but still saw a jump of 60 per cent.

The gains were all the more remarkable because applications increased in the second quarter as well, during the height of the COVID-19 shutdowns, so the surge was not a rebound from a bad period.

I am optimistic that the recovery from the COVID event will continue to be robust- Federal Reserve vice chair for supervision Randal Quarles

Randal Quarles, the Federal Reserve’s vice chair for supervision, noted the positive data report in a speech on Wednesday where he gave an upbeat view of the economic recovery.

“I attribute a good portion of that strength to the inherent dynamism and flexibility of the American economy,” Quarles said.

And though he noted the “deeply depressed” labour market, with unemployment falling hardest on low-income households, he said, “I am optimistic that the recovery from the COVID event will continue to be robust.”

The report does not break down the type of businesses being created, but more than a third were companies highly likely to pay wages.