The Kauffman Foundation cross-examined data from the U.S. Census Bureau, Fortune 500, and Inc. magazine to figure out how recessions affected new firm formations.

The study found that in general, bad economic times for the nation may not always impact entrepreneurship in the same way. After all, an individual may feel more apt to start a business once laid off, while entrepreneurs could target the newly unemployed as potential new hires.

Around 51 percent of Fortune 500 companies formed during such times, by comparing their founding years to expansion and contraction dates recorded by the National Bureau of Economic Research (NBER). That percentage jumps to 57 percent when excluding companies founded before 1855 – when NBER started tracking economic cycles.

A good portion of the most famous examples – Sears, 3M, Ford, General Electric – all rose during the Second Industrial Revolution, though this time was surprisingly riddled with economic contractions, the study said.

Current times, however, also may not be no more or less favorable for entrepreneurship than the past. Whether they are born in 1977 or 2001, the rate that new firms survive from age one to age five has remained remarkably similar, despite changing economic conditions.

More information about The Kauffman Foundation’s findings can be found in the study, “The Economic Future Just Happened.”

Wholesalers had cut inventories by 1.5 percent from the previous month’s levels in February, more than double of what Wall Street experts predicted. Since lower holiday sales led to more leftover goods than expected, cutting such excess inventory over the past few months became a necessary step toward economic recovery.

“It’s easy to see this reduction as an assurance that the contraction is continuing,” said Frank Ahrens, Washington Post analyst, in his column. “However, the sooner wholesalers adjust their inventories to match diminished demand, the closer they come to resuming profitability.”

Wholesale sales also increased by 0.6 percent to $319.7 billion – the first uptick seen since June 2008, and quite a recovery from January’s 2.4 percent sales decline. Coupled with the drop in wholesale inventories, this further indicates a slight resurgence in production as wholesalers began to seek new goods.

Steps taken by retailers to keep inventories lean are showing a bit of progress to accommodate to declining demand, as recent reports of early 2009 wholesale trade reveal.

As retail stores start sourcing their spring and summer merchandise, the National Retail Federation still expects a 5.3 percent rise in March retail container traffic from last month, a total of 1.07 million 20-foot-equivalent units (TEU).

At the same time however, such levels still fall below that of March 2008 by 7.4 percent – a trend that the trade group predicts to observe throughout the first half of 2009.

“This year’s numbers are going to remain well below last year because sales are still slow and most economists aren’t seeing a recovery before the second half of the year at the earliest,” said Jonathan Gold, vice president for supply chain and customs policy, in a statement released Friday. “Careful inventory management is a key to survival for retailers in the economic times we’re going through.”

And while retailers in some industries are still trying to shave off surplus inventory, rapidly declining sales have not made that task any easier to fulfill. A report released yesterday by the U.S. Census Bureau showed that in January, wholesale sales dropped more than four times faster than inventories.

Still, slightly declining wholesale inventory-to-sale ratios in a few categories – including apparel and miscellaneous non-durable goods – demonstrate that efforts made by retailers are still paying off, despite weak demand.

The 0.7 percent month-to-month decline in wholesale inventories also surprised economists. Seeking Alpha analysts had predicted a 1 percent decline in inventories, which now signals to them “either weaker consumption or stronger wholesale buying,” plus potentially good news later to be seen of retail sales.

On the Ground Below

The Bureau of Labor Statistics, National Retail Federation, and Census Bureau released reports indicating that wholesalers and retailers are still adjusting to the economic climate, as price indexes continued to fall:

• Retail container traffic fell in November for the 16th month in a row. With this finding in mind, the National Retail Federation maintains its hypothesis that 2008 will be the slowest year for traffic since 2004, with a year-to-year decline of 7.1 percent.

• U.S. wholesalers lowered their inventories by 1.1. percent in October, though sales also dropped by 4.1 percent from the previous month, according to a Census Bureau report released Wednesday.

• As reported today, wholesale prices of finished goods dropped by 2.2 percent in November, following monthly declines of 2.8 and 0.4 percents.

The Cloud of Consumer Pessimism

As these prices fell, a few research groups found record retail sale declines last month. The International Council of Shopping Centers even deemed Black Friday and the following weekend’s shopping days a “poor start to the holiday season sales,” as it observed a year-to-year decline of 2.7 percent.

The cause of these sales declines: a hibernating consumer, hiding from any temptations to spend money this holiday season:

• The ABC News Consumer Comfort Index measured record-low levels of confidence for the fifth week in a row, as reported on Tuesday. According to the poll, 92 percent of consumers surveyed said the nation’s economy is in bad shape, while 79 percent of them rated today’s buying climate negatively.

• Perhaps as a result, shopping ranked second only to dining out as one of the top activities consumers planned to decrease, according to a poll by the National Association of Television Program Executives and E-Poll Market Research. About 35 percent of consumers also said they planned to stay local more in their socializing, if not at home. They may also hesitate to buy any gifts full price this holiday season – though they were also willing to splurge on themselves, as Women’s Wear Daily reported.

Attempts to Find a Silver Lining

Meanwhile, researchers are taking such economic and behavioral conditions in mind, in trying to find positive news within it all.

• Some, like MasterCard’s SpendingPulse, traced the origins of rising consumer pessimism back to the ongoing depreciation of petroleum, as wholesale prices for it and petroleum products dropped by 11.2 percent last month.
  The research group reported yesterday a 3.8 percent decrease in total retail sales, excluding auto purchases – the biggest month-to-month decline it has ever measured. The caveat: without the rapid decline of gasoline purchases factored in, retail sales growth would have otherwise remained relatively flat.

• In its latest study, the Kauffman Foundation posed to question whether recessions were a good time to start a new business.
  The study, examining entrepreneurship up till 1975, did not reveal anything too conclusive, as the research group found a number of other factors that had to be considered. The research group also acknowledged that potential entrepreneurs would be unwilling to leave their jobs to found companies during recessionary periods.
  However, when the study excluded the Great Depression and World War II – the most unusual periods of time – the Kaufmann Foundation found that slightly more companies debuted during recession periods than expansion periods.

Overall, this week’s numbers showed that consumer pessimism remains persistent as retailers and wholesalers continued adjusting to the economic environment. Whether such feelings or downturn behavior will fade first, time has yet to tell. But either way, as the next few weeks pass by, and as the new year approaches, new perspectives could perhaps lead to new solutions – or, at the very least, a break in the cloud.