The tentative restart of the economy is looking all the more tentative.
Even as businesses around the country have opened in accordance with local regulations — easing some of the pain of March’s full-scale lockdown — many are still losing their jobs.
Last week, 1.5 million people applied for unemployment benefits, according to the Labor Department. Since mid-March, a total of 47.4 million people have applied for the government’s expanded jobless benefits. Many have returned to work, but 19.5 million remain on the unemployment rolls, according to the latest tally.
The unemployment rate stood at 13.3 percent last month and will be updated next week, having lurched from a 50-year low this year to levels not seen since the Great Depression.
There is increasing evidence that the comeback will be uneven as cases of the coronavirus spike in many states, including Florida and Texas.
Retail has both contributed to the increase in unemployment and is being hurt by it as people who look for work or wait to be called back curtail spending.
Many stores have closed for good and big companies are trimming back where they can. Macy’s Inc. said Thursday morning that it would cut 3,900 corporate and management roles as it seeks to save $630 million annually and the bankrupt J.C. Penney Co. Inc. said this week it would close another 13 stores on top of the 136 doors already set to be liquidated.
To get the economy up and running at full speed again, small business owners will also have to feel comfortable enough to hire again.
A report from IHS Markit noted that there were 10 million businesses in the U.S. with fewer than 50 employees last year, accounting for 44 percent of private sector employment.
“How many small businesses will be able to reopen and regain their footing will be key to an economic rebound, due to the critical role small businesses play in terms of jobs and driving economic growth,” said Ben Herzon, senior economist at IHS. “However, small businesses face a more challenging future than large companies, because they don’t tend to have cash reserves or access to credit to make their way through the storm.”