The largest retail trade association in the United States is calling on the government to pass another economic stimulus package to help small businesses stay afloat amid the coronavirus pandemic.
In a release, the National Retail Federation reported that small business owners are “increasingly pessimistic” about the ongoing impact of the COVID-19 outbreak. The remarks came in the September issue of the agency’s monthly economic review, which cited data from the Census Bureau’s Small Business Pulse Survey, launched on a weekly basis starting in May.
“The coronavirus continues as a shock to America’s small employers,” NRF chief economist Jack Kleinhenz said in a statement. “Small businesses are the backbone of American ingenuity and impact local economies in cities and towns across the country, but responses to recent surveys highlight the fragility of many small business enterprises and the importance of the need for well-tailored economic policy.”
In mid-May, the Census Bureau noted that 30% of respondents thought it would take at least six months for their companies to recover from the health crisis, while a quarter of those surveyed believed recovery would take only two or three months. In June, the number of respondents who said recovery would take six months rose to 44% and only 10% thought it could come in two or three months. Fast forward to the week ending Aug. 15 and 48% expect recovery to take six months and just 4.1% believed it might be possible in two or three months. Only 8.5% said that their businesses had returned to “normal levels.”
According to the NRF, optimism has declined even though the U.S. economy, for the most part, has reopened to the public. It also cited the Small Business Optimism Index from the National Federation of Independent Businesses, which declined 1.8 percentage points to 98.8 as of July — ending two months of gains after a low of 90.9 in April. Although the July figure was near the survey’s historical average, the number of businesses that anticipated better economic conditions in six months dropped 14 percentage points to a net 25%.
What’s more, the NRF reported that economists surveyed for the monthly Blue Chip Economics Indicators study said that the best way to support recovery was for the government to renew the extra $600 a week in unemployment benefits that expired at the end of July, followed by financial aid for small businesses. (Congressional leaders have yet to come to an agreement on whether to modify or continue the weekly benefits and put forth another stimulus plan.)
“Just as a physician checks a patient’s pulse to measure the rhythm and strength of the heartbeat, small business is an important indicator of the comparative health of the local and national economies,” Kleinhenz added.