New data show eight negative things, one hopeful one about economy

The cushion is disappearing.

As the coronavirus crisis drags on and the timeline for a vaccine remains uncertain, U.S. households and small businesses are rapidly running out of money, according to new federal data released Thursday.

Low-wage workers who had little in savings to begin with have been some of the hardest-hit by shutdowns at hotels, restaurants, stadiums, gyms, bars and many other businesses, Federal Reserve data shows. Many are struggling to pay their bills, even with government aid.

It’s a similar story for small businesses. About half will be out of cash within a month, according to data from the Census Bureau. While the federal government has moved to provide emergency loans and grants to small businesses, many owners have told The Washington Post that the grants came with too many strings attached. Others say they worry about taking on loans when they do not know how long they will be closed or operating at half-capacity.

Below are eight key statistics that illustrate where the economy is hurting and may hurt most.

Nearly 40% of low-income Americans lost jobs in March

Thirty-nine percent of Americans with household income below $40,000 lost jobs in March, according to a recent Fed survey of more than 1,000 people conducted April 3 to 6. These are people who had a job before the pandemic but then lost it. In contrast, 13% of Americans earning over $100,000 lost jobs in March.

“While we are all affected [by the pandemic], the burden has fallen most heavily on those least able to bear it,” Fed Chair Jerome Powell said Wednesday as he urged Congress to do more to aid the economy.

A huge issue is that only certain types of work can be done from home. Sixty-three percent of workers with a college degree could fully work from home in March, the Fed found, versus 20% of workers with a high school diploma or less.

More than a third of people who were laid off could not pay their bills in April

According to the Fed survey, 18% of Americans did not expect to have enough money to pay all of their bills in April as the fallout from the coronavirus deepened, and it was unlikely that people would return to work soon. The results were even more painful for people who lost their jobs: 35% of people laid off believed they would miss a payment in April, the Fed found.

The Fed conducted its economic “well-being” questionnaire just before the $1,200 relief checks began to go out from the U.S. Treasury, providing a lifeline for many poor and middle-class Americans who have lost a job or had their hours reduced.

But there are ongoing signs that Americans continue to struggle with their bills. A third of renters have not paid their May rent in full, according to a survey by Apartment List, an online rental marketplace.

Fewer than 1 in 5 businesses could hold out for three months

About 7% of U.S. small businesses said in late April and early May that they had no cash on hand, and another 9.5% said they cannot cover more than a week of operations, according to the Census Bureau. About half would be out of cash within a month, and 17% said they could last 3 months or longer without revenue.

Already, 11.5% of small businesses—including 29.5% of accommodation and food-services operations—reported missing loan payments. And 24% reported missing other bills or scheduled payments. That number soars to 51% for food services and accommodation.

There are two different “pulse” surveys underway by the Census Bureau. Small Business Pulse, the first of which was released Thursday, will be sent to about 100,000 different businesses every week for nine weeks, showing how the economic crisis has affected businesses and how they’re coping. A similar survey of U.S. households is scheduled to be released Monday.

Nearly half of laid-off Americans are barely ‘getting by’

More than 36 million American workers have applied for unemployment aid, according to the Labor Department, meaning nearly 1 in 4 workers who had jobs in February are now furloughed or laid off. As that toll escalates, so does the financial duress, especially if people are not able to get aid quickly.

Among Americans able to keep their jobs, 76% said they were doing at least OK financially in April; among those who lost a job or had their hours cut, 51% said they were doing at least OK financially, the Fed found.

Nearly half, 48%, of those laid off or facing reduced hours in April said they were “finding it difficult to get by” or “just getting by.”

Supply-chain problems hit 2 in 3 retailers

Nationally, most small businesses surveyed by the Census Bureau reported a large negative effect from the pandemic in the week from April 26 to May 2. That number ranges from 83.5% in food services and 75% in arts, entertainment and recreation to 7% in utilities and 27.5% in finance.

The virus has wrought havoc upon retail supply chains, as transportation and warehousing businesses report negative pandemic effects at above-average rates. About two-thirds of retailers reported supply-chain problems, compared with about 45% of businesses nationally. Health-care and wholesale-trade businesses also reported major disruptions.

Supply-chain issues were most pronounced in the Deep South states of Louisiana, Alabama and Mississippi, where more than half of businesses reported disruptions. Maine businesses also saw an unusually high level of supply-chain trouble.

3 in 4 businesses lose revenue

Three-quarters of U.S. small businesses reported a drop in revenue, with all but one sector (utilities) reporting drops of at least 60%. Eighty-four percent of health-care and social-assistance businesses saw revenue fall.

About 2 in 5 businesses had to close a location for at least part of the week, including more than 70% of businesses in education services or in arts, entertainment and recreation.

Nationally, 27.5% of businesses reported that they cut the number of paid employees during the week of the survey, including 47% of businesses in food services and accommodation.

That segment, which includes restaurants, bars and hotels, is trying to adapt: 42% of such businesses reported pivoting to carry-out- or delivery-based business models. In retail, the number was 32%.

Three-quarters of small businesses applied for the Paycheck Protection Program

Three-quarters of small businesses requested loans from the federal Paycheck Protection Program, including more than 80% of those in manufacturing, educational services, health care and food services. Seventeen percent of businesses reported seeking no assistance at all – not even from friends, family or savings.

Wyoming businesses were the most self-reliant in the nation, with 1 in 3 reporting that they had not sought any form of assistance.

Puerto Rico has been hit harder than anywhere else in the U.S.

Overall, more small businesses in Puerto Rico reported large negative effects (65%) than in any state or the District of Columbia. Yet businesses there have requested (and received) Paycheck Protection Program loans at the lowest rate in the nation.

In Puerto Rico, 46% of businesses reported cutting employees in the week of the survey, and 77% reported closing locations during at least part of the week – easily the highest share of any state or territory. D.C. was next at 64.5%.

The island territory’s problems could compound – more than two-thirds of businesses there reported supply-chain disruptions, easily the highest rate in the nation. Fewer than 10% of businesses on the island said they have enough cash to cover three months or more of operations.

A hopeful note

One somewhat hopeful sign? Just 6% of U.S. small businesses said they believe things will never return to normal. Most said it would take more than four months though, with about a third falling into the more-than-six-months category.

Similarly, 9 in 10 people who were furloughed or lost a job expected to return to it at some point, according to the Fed data. This shows optimism that people will only be out of work temporarily, instead of facing a permanent job loss that can have devastating effects for years to come, triggering the loss of a home or car.

That said, the Fed survey was conducted the first week in April. A Washington Post-Ipsos poll of more than 900 laid-off workers conducted April 27 to May 4 found that 77% expected to return to work, perhaps reflecting the growing reality that some businesses are closing forever or going bankrupt and unlikely to bring back as many workers.

In the Fed survey, 77% said that their boss told them they were likely to return to work, but that the boss did not give a specific return date.