One in five small businesses estimates that, absent an economic turnaround or another government lifeline, they will have to close their doors within six months.
By Martha C. White
First-time jobless claims for the final week of August came in at 881,000, exceeding analyst expectations and marking the lowest weekly total since the pandemic began.
Part of the reason for the dip is that the government changed the way it accounts for seasonal fluctuation in the labor market. The adjustment is supposed to yield more accurate data in the long run, but it also diminishes the significance of the weekly drop in the numbers released by the Department of Labor.
Although President Donald Trump has boasted on Twitter of soaring job gains within the past three months, economists say this ignores the inescapable fact that the economy is still nearly 13 million jobs shy of where the country was in February — and the mom-and-pop businesses that are America’s primary engine of job growth are losing ground.
“The fact remains that these are extremely elevated numbers and that we have to brace for further job loss in the coming weeks and months,” said Mark Hamrick, senior economic analyst at Bankrate.com.
“Small businesses represent 65 percent of all new jobs created,” said Eric Groves, co-founder and CEO of business-to-business technology firm Alignable, which uncovered a new — and alarming — trend in small business sentiment: Owners anticipate more layoffs.
Alignable surveyed more than 4,000 business owners and found that they had regained an average of a little over 80 percent of their pre-pandemic head count by August, but expected that to drop to 70 percent within the next 30 days.
“For the first time since July, when we started covering the recovery, we saw their outlook decline. We’ve seen it flat before, but I’ve never seen it come down,” Groves said.
“I would be really scared to bring anybody back,” said Tina Lyons, owner of a commodities freight transportation company in Portland, Oregon. “I’ll just put my head down and take it for a while — I’ll just do the work myself. Things are so uncertain.”