When I click "File" and then "New" it keeps opening a new file as a layer and not a background. RGB is selected as the mode.

When I click "File" and then "New" it keeps opening a new file as a layer and not a background. RGB is selected as the mode.
With new files opening as a layer and not a background I'm not able to create multiple layers and it wont let me convert the layer to the background.
How did this happen. I used PS just yesterday and had no problems. Today my computer did mandatory updates and now this.

Yes. You are using the Ellipse Tool's Pixel option. So it is laying down pixels as it is supposed to do without creating a layer.
Choose the Shape option:
Also Layer menu > New Layer creates layers and the curled paper at the bottom of your Layers palette also creates a New Layer. I hope those work.

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