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Small Business and Employment
Calculated Risk —
Atlanta Fed research economist Melinda Pitts writes at Macroblog: Prospects for a small business-fueled employment recovery In a speech yesterday, William Dudley, the president of the Federal Reserve Bank of New York, identified financial constraints for small businesses as a restraint on the pace of economic recovery.Dr. Pitts excerpt from William Dudley's speech, and then notes: President Dudley's comments are even more relevant in the current recession if one considers the disproportionate effect the recession has had on very small ...
links for 2009-10-06
Economist's View —
... Fiddling with accounting rules won’t fix the banks - voxeu.org
Prospects for a small business-fueled employment recovery - macroblog ...
The schizophrenia of Economics
Lawrance G. Lux —
Melinda Pitts defines the problem quite well, though still not citing the base causation of a lack of Consumer Demand for Product. Small Business will not survive if the Public corrals its discretionary Income as Savings for sudden surges in Price from Necessities. Small Businesses rarely provide Necessity Product, though it presents considerable Service industry; they having somewhat of an advantage in the later, with lower Overhead Costs and short Carry Credit. It is still not an environment where added labor would seem rapidly necessary, as Consumers put off even basic ...
Afternoon Commentary
EconLog: Library of Economics and Liberty —
... correctly derides the idea of a tax credit for "new" jobs. In addition to his arguments, I would say that the inframarginal portion of a general cut in the employer portion of the payroll tax would not be a bad thing. It would increase profits, which would reduce the need for businesses to rely on credit markets to fund investment. According to Melinda Pitts , small business is getting hammered in this recession. Not surprising, considering that the big boys are all getting bailed out.
Wednesday links: trade opportunities
Abnormal Returns —
... Small businesses have seen a large proportion of job losses in this recession. (macroblog) ...
Report: Pimco, Baupost Quit CIT Bondholder Committee
Calculated Risk —
... Small firms have already been hit hard in this recession, accounting for about 45% of the job losses (see Melinda Pitts at Macroblog: Prospects for a small business-fueled employment recovery): ...
Being Hit With A Disportionate Share Of The Fallout
Daily Markets —
... Although cynics might put it down to the Kool-Aid - er, water - that flows through the financial district, there may be another reason why Washington and Wall Street - and even parts of corporate America - are more upbeat about near term prospects than the man in the street: a part of the economy that often flys beneath the mainstream radar is getting hit with a disportionate share of the fallout from the financial crisis. In “Prospects for a Small Business-Fueled Employment Recovery,” the Federal Reserve Bank of Atlanta’s macroblog discusses the impact that the Great ...
Banks Reducing Lending to Small Businesses
Calculated Risk —
... is mainly due to weak banks unable or unwilling to lend, then a turnaround in credit creation may have to wait until banks' balance sheets are repaired, a process that could be delayed by further expected defaults in consumer loans, mortgages and commercial real-estate loans. There is more on small businesses including excerpts from NY Fed President William Dudley's speech: A Bit Better, But Very Far From Best, and from Atlanta Fed research economist Melinda Pitts: Prospects for a small business-fueled employment recovery ...
The Bank Lending Channel
Economist's View —
... are still trying
to come out of it. For them to go to a bank, if they are showing weak
performance, it is harder to borrow.”
As the financial crisis has largely eased in recent months, big companies have
found credit increasingly abundant, with bond issues sharply higher.
But for ... many smaller companies,... borrowing remains tough. ...
Recall this graph posted here not too long ago (discussed further at the source): ...
"The Growing Case for a Jobless Recovery"
Economist's View —
... "At the end of August there were estimated to be fewer than 2.4 million job
openings, equal to only 1.8 percent of the total filled and unfilled positions—a
new record low."
This development could, of course, turn around as business activity picks up,
but there is more than a little evidence that some structural impediments are
afoot.
Job losses have been disproportionately concentrated in small
businesses. (Oct.
6, 2009)
As Melinda Pitts pointed out a few weeks back, businesses with fewer than ...
A Response to "The growing case for a jobless recovery"
The Bonddad Blog —
... this time is worse, many economists say. Most forecasters now expect a prolonged period of high unemployment ...."He next notes that Job opportunities are scarce, relying on the Job Opportunities and Labor Turnover Survey, a/k/a "JOLTS", to the effect that "At the end of August there were estimated to be fewer than 2.4 million job openings, equal to only 1.8 percent of the total filled and unfilled positions—a new record low."Additionally, Job losses have been disproportionately concentrated in small businesses : ...
Report: CIT to File Bankruptcy on Sunday
Calculated Risk —
... Note: CIT provides financing for about one million small businesses, so a prepackaged bankruptcy that allows the company to continue to operate would be helpful. Small businesses are already having trouble obtaining credit, and this might be impacting hiring plans (see from Melinda Pitts at Macroblog: Prospects for a small business-fueled employment recovery ) ...
