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Small Business Employment Recovery Falters In States With Rising COVID-19 Numbers

  • Job recovery at small- and medium-sized businesses has slowed or reversed in states that have seen a recent surge in COVID-19 cases
  • Employment at these companies is down 23 percent on an annual basis
  • Effect largely concentrated in Sun Belt states, where shutdown orders have been reinstated

States that have seen a recent spike in confirmed COVID-19 cases have also experienced a slowdown, if not a reversal, in job recovery at small- and medium-sized businesses, according to a recent report by the small business scheduling firm Homebase. The weaker labor market has primarily been concentrated in the Sun Belt, where governors have reinstated shutdown orders.

A CNBC analysis of the Homebase report found that in six states the number of employees returning to work at smaller firms was down 5 percent between June 14 and July 19. These included Arizona, Florida, and Texas, which have had some of the most significant increases in COVID-19 cases since reopening their economies earlier this year.

Nationally, Homebase data shows a 23 percent year-over-year drop in the number of employees working at small- and medium-sized businesses. The data is weighted toward service jobs, but has been identified by researchers at the St. Louis Branch of the Federal Reserve of potentially being a predictor of the overall labor market.

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