The smallest U.S. businesses — those with no employees other than the owner — struggled during the past year with 76% of the firms suffering a decline in revenue over 12 months, a new survey by regional Federal Reserve banks found.
Just 13% reported revenue growth in the survey, which was led by Cleveland Fed researchers and published on Monday. The result showed that the smallest firms suffered more than large firms during the Covid-19 pandemic, the Fed research found.
Among the nonemployers, 32% characterized their financial condition as “poor” at the time of the survey, and 81% of nonemployer firms experienced some type of financial challenge in the 12 months prior to the survey. Compared to employer firms, nonemployers more often turned to personal funds and reported some impact to household finances as a result of those challenges.
Fed officials took a step last week toward eventually scaling back their pandemic support for the U.S. economy. They also said that the economy had made progress toward goals on employment and inflation, a move closer to tapering of $120 billion in monthly asset purchases. They will assess future progress at upcoming meetings.
