COVID-19

Small business optimism overall is way up, but not for all owners

Mitchell Hartman Oct 13, 2020
Heard on: Marketplace Morning Report
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Small businesses in the services sector have a more bleak outlook as they continue to navigate COVID restrictions. Valerie Macon/AFP via Getty Images
COVID-19

Small business optimism overall is way up, but not for all owners

Mitchell Hartman Oct 13, 2020
Small businesses in the services sector have a more bleak outlook as they continue to navigate COVID restrictions. Valerie Macon/AFP via Getty Images
HTML EMBED:
COPY

There’s still no progress on another round of coronavirus relief coming from Washington, around 25 million Americans are still on unemployment and it appears that COVID-19 is resurging in many parts of the country. So this may come as a surprise: The National Federation of Independent Businesses just released its “Small Business Optimism Index” for September, and it’s back to pre-pandemic levels after tanking in the spring.

NFIB chief economist Bill Dunkelberg said the index found “a lot of good things have been happening in a lot of parts of the country.”

“We’re opening the economy up, people are going back to work, sales have been definitely rising,” Dunkelberg said.

But that’s not the case everywhere. NFIB’s membership is concentrated in small towns and cities, and primarily in industries that have rebounded the fastest, like manufacturing and construction. 

The NFIB optimism index includes fewer respondents from the service sector, like restaurants and retail shops.

Those small businesses have a more bleak outlook, said accountant Paul Peterson, managing partner of Wiss & Company, which serves clients in New York and New Jersey.

“In a lot of our conversations with clients recently, it’s been almost a sense of gloom,” Peterson said.

In September, his firm conducted a national survey of 300 small businesses with Sapio Research. It found that that 10% of small businesses have already shut down and another 5% plan to in coming months.

COVID-19 Economy FAQs

How are Americans feeling about their finances?

Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.

Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.

Are people still waiting for unemployment payments?

Yes. There is no way to know exactly how many people have been waiting for months and are still not getting unemployment, because states do not have a good system in place for tracking that kind of data, according to Andrew Stettner of The Century Foundation. But by his own calculations, only about 60% of people who have applied for benefits are currently receiving them. That means there are millions still waiting. Read more here on what they are doing about it.

What’s going to happen to retailers, especially with the holiday shopping season approaching?

A report out Tuesday from the accounting consultancy BDO USA said 29 big retailers filed for bankruptcy protection through August. And if bankruptcies continue at that pace, the number could rival the bankruptcies of 2010, after the Great Recession. For retailers, the last three months of this year will be even more critical than usual for their survival as they look for some hope around the holidays.

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