Small Business Helps Power Economic Rebirth

Goldman Sachs
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Entrepreneurial Americans have been busy during the pandemic.

According to the Census Bureau, more than 4.4 million new businesses have been created in the U.S. since last March.

The Small Business Story

It’s not unusual for business starts to increase during a recession, as people who have lost jobs turn to self-employment to try to make “it” happen. What is unusual, according to professor John John Haltiwanger, is “the magnitude, not the direction.”

Feeling empowered by the wealth of resources available in the “creator economy” including accounting, supply chain, insurance, and SEO resources, there is no sign of business starts slowing down — in January alone there were half a million new businesses started in the U.S.

The Economics: Of the business started since last March, the Census Bureau estimates that 35% are “likely employers.” Meaning they will help contribute to job growth.

  • Yesterday Goldman Sachs Chief Economist Jan Hatzius said he is optimistic about job growth due to “reopening, fiscal stimulus, and pent-up savings.”
  • Hatzius sees the jobless rate coming down to 4.1% by the end of the year, down from its current 6.2%. While still below the 3.5% pre-pandemic unemployment (the lowest rate in over 50 years) the economy has recovered from a staggering 14.8% in April 2020.
the takeaway

While the progress is encouraging, hardship persists as overall employment remains down 8.5 million jobs vs. pre-pandemic.