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Spike In Jobless Claims Comes After PPP And Other Pandemic Benefits Expired

“We were expecting to bring in about $20,000 a month this summer. We’re bringing in more like $1,000,” said one small-business owner.

The unexpected jump in weekly initial jobless numbers to more than 1 million is a red flag about the stability of small business in the United States.

The first week of claims data after the Paycheck Protection Program stopped accepting applications shows the need for renewed stimulus for small businesses and consumers, advocates and business owners say.

“We’ve had to lay off and furlough. The good thing is business is picking up, but we’re nowhere near where we were March 12 — that was our last working day before the pandemic,” said Brandy Woods, who owns two Houston-area child care centers.

Woods is still nine employees short of her pre-pandemic staff of 25. “The PPP funding is definitely over. It did take us through six payroll cycles,” she said, which allowed her to keep her seven-year-old business running through the summer.

“At this point we’re running at a loss,” Woods said. “Every day, I’m worried about whether we’re going to be able to keep up with our expenses.”

Her concern is valid, said Holly Wade, director of research and policy analysis at the National Federation of Independent Business Research Center.

“The PPP loan program has been very helpful for most small businesses in supporting business operations,” Wade said. “However, many small business owners are still far from pre-COVID sales levels,” and as those relief funds are exhausted, both jobs and the businesses themselves are at risk.

Data from business review site found an increase of 15,742 permanent closures since June 15. Permanent closures now account for more than half of all pandemic-related business closures, the site said.

In July, Jeremiah Anderson crunched the numbers and realized he would be out of business within a month. As co-owner of White Rose Restaurant Group, Anderson runs a trio of restaurants in York, Penn. and oversaw a pre-pandemic staff of more than 300 — a figure that dropped by more than 90 percent after the initial shutdown in March.

With PPP funds, the business had reopened in fits and starts beginning in April, but it wasn’t enough. “We were losing money every day,” Anderson said, the result of restrictions on dining capacity and limits on alcohol sales.

Shutting down, he said, was the only chance of saving the business. “Just to preserve our business, we have to wait until these restrictions are eased,” he said. “We shut down because we needed to preserve what we had available so we can reopen someday.”

Small businesses face a rapidly brewing perfect storm, experts warn. “There are a set of factors coming together that will have a significant, negative impact on consumer demand and job growth, including the expiration of small-business relief programs and the expiration of the emergency unemployment benefits,” said Amanda Ballantyne, executive director of Main Street Alliance, a network of small business groups.

“We were expecting to bring in about $20,000 a month this summer. We’re bringing in more like $1,000,” said Leslie Moody, who owns an eco-retreat outside of Santa Fe, New Mexico, with her husband. “Hopefully we’ll get through the winter. We just need folks to function in Washington so we can stay afloat.”

With their allocation of PPP funds already spent, Economic Injury Disaster Loan funds are keeping the property — where Moody and her family also live — ahead of roughly $7,000 in monthly bills. Moody says the expiration of the expanded $600 weekly unemployment benefits is causing that pool of money to shrink much more quickly.

“Since the end of July when the enhanced unemployment benefits dropped off, we’re basically dipping into that,” she said. “My husband and I get $169 each a week. It’s not enough to make a mortgage payment, let alone survive on.”

In a survey of NFIB members conducted this week, nearly one in four PPP borrowers either already have or expect to lay off workers within six months, and almost half expect to need additional financial support over the next year. More than one in five said they will be out of business within six months if the economy doesn’t improve, heightening labor economists’ worry that job losses early in the pandemic that were assumed to be temporary will become permanent.

“This is a reminder that underneath the public health crisis, the economy is also experiencing a more traditional recession where the decline in economic activity is rippling across sectors,” said Daniel Zhao, senior economist at

“I think that most people expected that Congress would pass another relief package before heading off on recess and now, as many programs have expired with no clear timeline on renewal, there’s a growing panic about the future — both for workers and for small-business owners who rely on consumer demand,” Ballantyne said.

With no sign of a break in the legislative logjam, business owners fear what will happen if the nation faces a second wave of COVID-19 or a local outbreak triggers a shutdown.

“I think we’ll see a dramatic rise in small business closure in the third quarter of this year,” Ballantyne predicted. “Many business owners were holding out from a summer bump in revenue and are now looking at mounting debt in an increasingly unstable economy.”

“If we have another surge and we go back into a code red or we have another serious outbreak and we reduce students again, then I would be worried,” Woods said of her child care center, adding that she also worries about being able to obtain future relief funds. Her initial PPP application was approved, but the funds were depleted before it was processed and she had to wait until the second disbursement in order to get funding — a frustration disproportionately borne by women- and minority-owned businesses like hers.

“I just think women, and, in particular, minorities just have less access and… the ability to apply fast and be able to produce what’s needed,” she said. “I don’t have a legal and financial team ready sitting at my office ready to prepare that paperwork.”


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