It’s closing time for many small businesses in New York City. As the pandemic drags on and federal aid runs low, many owners are calling it quits.
The New York Times said a new report from the Partnership for New York City estimated that one-third of the city’s 240,000 small businesses could close down and vanish. Looking at the big economic picture, all those closings would put a drag on the economy even when a recovery finally sets in.
According to the new study, New York City's small businesses had already trimmed or eliminated 520,000 jobs. Besides being essential to the city’s economy, those small businesses help to define the culture and flavor of the neighborhoods.
Yelp said that more than 2,800 businesses in the city have already permanently closed since March 1, which is a higher number than any other large U.S. city.
The Times said Manhattan has been the hardest-hit New York City borough, with about half of the closings in that area. Due to the pandemic, the buildings that typically deliver a steady stream of customers to surrounding businesses have paused or slowed their in-office activities. According to the report, some wealthier residents have left town for second homes, while tourism has plunged.
While the city is famous for its many Fortune 500 headquarters, small businesses employ more than three million people, which is reportedly about half of its workforce.
Meanwhile, in national economic news, Federal Reserve Chair Jerome Powell said on Wednesday (July 29) that the path to recovery is “extraordinarily uncertain,” and may hinge on how well the country does in keeping the pandemic under control.
“Indeed, we have seen some signs in recent weeks that the increase in virus cases and the renewed measures to control it are starting to weigh on economic activity,” Powell said in a press conference following a two-day meeting in which the central bank decided to leave its key funds rate unchanged.