The number of Americans who were self-employed dropped in August to the lowest level in eight years, showing the economic recovery is not strong enough to nurture new businesses.

There were 8.68 million people working for themselves last month, the fewest since January 2002, according to Labor Department data released today. That’s down 13 percent from a record 9.98 million reached in December 2006, 12 months before the latest recession began.

Self-employment tends to increase during and immediately following economic slumps as tight labor markets prompt recently fired workers to venture out on their own, said Scott Shane, a professor of economics at Case Western Reserve University in Cleveland. The data this time is testament to the lack of credit and a slump in demand that is choking small businesses, he said.

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Filed under: * Economics, Politics • Economy • Corporations/Corporate Life • Credit Markets • Labor/Labor Unions/Labor Market • The Banking System/Sector • The Credit Freeze Crisis of Fall 2008/The Recession of 2007--

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