Every month, we share our thoughts on the state of Main Street amidst the global pandemic. With information from over 60,000 businesses and one million active hourly employees, our data offers insight into how the US small business economy is faring and what we might expect in the coming months ahead.

You can find the full report here, but here’s a snapshot of what we saw in September.

How did Main Street fare in September (30-second snapshot)

For the third continuous month since June, our Main Street economic indicators remained flat, with 20% of businesses still closed nationwide.

But for the first time since the onset of the pandemic, we saw our employment metrics fall, ending the 6-month period of upward trajectory and signaling worsening conditions ahead for the small business economy.

Having observed declines across states and in industries more sensitive to end-of-summer / back-to-school headwinds, we expect conditions to decline further as we head into autumn and operating outdoors becomes more challenging for businesses as cooler weather sets in.

Third month of stagnation

With 20% of small businesses still closed, Main Street metrics stayed virtually flat vs. August (and vs. June more broadly).

In a sense, this is better than what we had expected, as the end of summer typically is accompanied with a more noticeable slowdown of business activity (as seen below with the 2019 line).

This could be explained by intentional reduced staffing. While typically we see increased hiring at the beginning of summer and a consequent reduction in labor at the end of summer (as seen above with the 2019 line), business owners likely maintained leaner teams this year to manage labor costs during the pandemic to extend the longevity of their business.

Alternatively, we may see a delayed end-of-summer decline this year if businesses are trying to take advantage of the last few days of warmer weather before officially heading into autumn earlier this week. If so, we may see more noticeable declines in October as temperatures dip even further.

Declines starting to creep in

Looking at employment, we saw a decline in the number of employees working for the first time since the onset of the pandemic, ending a 6-month period of recovery for small businesses.

For each sample period, we mirror the Bureau of Labor Statistics and look at the calendar week that contains the 12th day of the month. In September, this week included Labor Day, which may have contributed to a more severe decline. Nonetheless, if we look at the following week (week of 9/13), we see that the average change vs. January for the week is -22%, which is lower than that of August’s, indicating that employment levels have slightly decreased in September.

Similarly, we saw that the number of businesses open and the number of hours worked in September were both slightly lower than August levels, potentially signaling that worsening conditions lie ahead. We saw that this decline in hours worked spanned across states, with 80% of states experiencing a decline in September.

Leisure and entertainment industry as an early indicator of what lies ahead

When looking across industries, we noticed that the leisure & entertainment industry stood out as an anomaly. While the other industries have largely moved together in lockstep, the leisure & entertainment industry experienced an accelerated decline in the last few weeks.

This is likely explained by the end of the summer: with students heading back to school and cooler weather setting in, summertime recreational hubs like waterparks and mini-golf see decreased demand. With the pandemic limiting indoor options for businesses, this decline observed within the leisure & entertainment industry might be more widespread across industries this autumn.

How has Homebase data been validated?

We’ve partnered with a number of academics, researchers, and policy makers to validate and improve our data. Here are a few examples:

The St. Louis Federal Reserve suggested that Homebase data could be predictive of the jobs reports
Researchers at Drexel used Homebase data to estimate the “true” employment level
A team at UChicago and Berkeley used Homebase data to show disparate impacts across different groups

Methodology and definitions

This dataset is based on Homebase data gathered from over 60,000 businesses and 1 million hourly employees active in the US in January 2020. All the rates compare that day vs. the average for that day of the week for the period Jan 4, 2020 – Jan 31, 2020.

  • “Hours worked” is calculated from hours recorded in Homebase timecards
  • “Locations open” is based on whether a business had at least one employee clock-in
  • “Employees working” is based on the distinct number of hourly workers with at least one clock-in

Questions or comments about our findings?

Contact Ray Sandza (VP, Data & Analytics) and Kevin Liang (Manager, Data Products) to learn more about our findings and our data.

Homebase makes work easier for 100,000+ small (but mighty) businesses with everything they need to manage an hourly team: employee scheduling, time clocks, team communication, hiring, onboarding, and compliance. We are not Human Capital Management. We are not HR Software. We’re tools built for the busiest businesses, so owners and employees can spend less time on paperwork and more time on what matters.