Small Business Week In Review: 02/09/09

Economic News Roundup & Stimulus Plan

House speaker Nancy Pelosi’s team published a graph comparing the recent job losses to previous recessions.

This chart compares the job loss so far in this recession to job losses in the 1990-1991 recession and the 2001 recession – showing how dramatic and unprecedented the job loss over the last 13 months has been. Over the last 13 months, our economy has lost a total of 3.6 million jobs – and continuing job losses in the next few months are predicted.

If the current recession resembles those that occured after Word War II, then job losses should peak by the end of this summer.  According to data gathered by Chris Pulva, unemployment figures peaked 17 months into the 1981 recession.  A colleague of ours who works for a major manufacturing firm indicated that his employer has made all its cuts for 2009.  Additional cuts will come in Q4 2009 if the economic conditions deteriorate further.

Joel Prakken, chairman of Macroeconomic Advisers, the  firm that responsible for the monthly ADP National Employment Report suggests small business job losses are far from done.  Up to 2 million more small business jobs could be lost by 2010.

In January, small-business employment racked up its 12th straight monthly decline, dropping 175,000 jobs, or 0.4%, from December to 49.9 million, according to the report released last week.

Since February 2008, when the total small-business job count was 50.9 million, small firms have cut 1 million, or about 2%, of their jobs.

An additional 12 months of decline is probably in the cards before a turnaround, even with the passage of a stimulus package, said Prakken, who noted that employment typically lags behind the performance of the nation’s gross domestic product.

Members of Congress are conflicted about how to improve conditions in the small business sector while small business owners eagerly await the new tax breaks in President Obama’s $819 billion stimulus plan.

The House and Senate economic stimulus bills take different approaches on how to help small businesses do their part in pulling the United States out of recession. The two leading small business associations have outlined other proposals they wish Congress would consider as well.
The small-business sections of the House-passed bill focus on encouraging lending under the Small Business Administration’s two main loan programs.
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The measure under consideration in the Senate focuses more on raising SBA loan limits rather than creating new programs within the SBA

Small Business Summit in New York

The Fourth Annual Small Business Summit was held in New York last week.  Anita Campbell, editor of smallBizTrends covered the event:

And that’s a wrap.  Stay tuned for next week’s edition of the Small Business Week in Review.

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February 9, 2009 | news 

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