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U.S. unemployment could be heading higher as small businesses face growing pressure. $LYN
In February, 11% of small businesses reported “poor sales” as their biggest problem, one of the highest readings since 2020. The issue now ranks as the 4th most-cited concern, behind taxes, labor quality, and inflation.
This figure has tripled over the past three years and is now approaching levels typically seen during past recessions. Since small businesses are the largest employers in the U.S. economy, weakening sales often acts as a leading signal for rising unemployment.
If the trend continues, the U.S. unemployment rate could climb above 5% in the coming months, up from the current 4.4%, marking the highest level since the pandemic recovery in 2021.
Small businesses are clearly feeling the strain.