MOUNT KISCO, N.Y., Aug. 25, 2020 (GLOBE NEWSWIRE) -- In a recent bulletin to clients, The Jerome Levy Forecasting Center LLC (www.levyforecast.com) noted that, “the present contrast between booming sales and profits at many big retail and consumer goods firms and the dire straits of many small firms is exceptional.”
According to Srinivas Thiruvadanthai, Director of Research, “The emergence of a national small business crisis against a backdrop of strong S&P 500 third-quarter earnings may well become a front-page story by Election Day.”
John C. Nahra, the bulletin’s author and an economist at the independent macroeconomic forecasting and consulting firm, wrote that in the third quarter, “big company profits will be boosted in part by especially strong earnings from pandemic-resistant (or even pandemic-boosted) tech firms, online mega-retailers, and other beneficiaries of the lifestyle and spending changes brought about by COVID-19 and by massive federal transfer payments to households.”
In contrast, conditions in the small business sector are showing signs of worsening. Moreover, with only modest cash buffers and lack of access to capital markets, “small firms are ill-equipped to survive months of significantly reduced revenue, and their viability decreases with each passing month of depressed activity.”
The bulletin concludes that small business travails will be an enormous economic, social, and political issue well into next year and that, “burgeoning small business failures will have broad financial and economic effects including rising unemployment, declines in the wealth and incomes of households owning small businesses, deteriorating commercial real estate markets, surging loan losses at small and regional banks, and lasting damage to local communities around the country.”
About The Jerome Levy Forecasting Center LLC
The Jerome Levy Forecasting Center LLC is an independent economic research and consulting firm that has been specializing in using the macroeconomic Profits Perspective in economic analysis and forecasting for seven decades. The goal of the Levy Forecasting Center is to improve its clients’ business and investment performance by providing them with powerful insights into economic risks and opportunities – insights that are difficult or even impossible to achieve with conventional approaches to macroeconomic analysis. Additional information may be found at www.levyforecast.com.
For media inquiries contact Robert King at The Jerome Levy Forecasting Center – rking@levyforecast.com.