Barbershops, nail salons and other providers of personal services appear to be hardest hit, according to the Fed study, accounting for more than 100,000 closures beyond historically normal levels between March 2020 and February 2021. Individual companies account for about two-thirds—or roughly 130,000—of the extra closures if historical patterns hold, according to the Fed economists, who examined businesses with employees. Other closed establishments are units of major companies—say, a Gap or Pizza Hut—that closed some locations while remaining in businesses.
One earlier study estimated that more than 400,000 small businesses had closed in the first three months of the pandemic.
The Fed estimates don’t include the roughly 26 million U.S. businesses without employees. Business failures traditionally have been highest among the smallest firms, those with fewer than five employees. Read the full story. The new estimates are preliminary. In addition, some businesses that have hung on could eventually collapse under the weight of back rent, unpaid loans and other expenses.
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