"Disastrous Economic Situation" - Small Firm Bust Goes Unnoticed As Economy Flounders

The virus-induced recession has resulted in deep economic scarring that will be seen for years. Tens of millions of Americans remain unemployed, broke, and hungry. US bankruptcies of large companies are on pace to hit a 10-year high, with even moredevastation seen among smaller firms.

The collapse of small business is absolutely shocking, considering firms with under 500 employees account for about 44% of US economic activity.

Bloomberg notes a "wave of silent failures goes uncounted in part because real-time data on small business is notoriously scarce, and because owners of small firms often have no debt, and thus no need for bankruptcy court."

"Probably all you need to do is call the utilities and tell them to turn them off and close your door," said William Dunkelberg, chief economist for the National Federation of Independent Business.

Dunkelberg warned: Small business closures "are going to be well above normal because we're in a disastrous economic situation."

Yelp's latest data on business activity shows more than 80,000 companies permanently shuttered operations from March 1 to July 25. What's concerning is that 60,000 of these closings were small firms.

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