Thread by @_Investinq

Small businesses are the backbone of America.

There are nearly 35 million of them compared to fewer than 20,000 big corporations.

They’re responsible for almost 80% of all job openings in the country.

But that engine is slowing down fast.

(a thread)

In September, small business job openings fell to the lowest level since the 2020 crisis.

That’s one of the most reliable early warning signs for higher unemployment.

When small firms stop hiring, it usually means business is slowing and layoffs are coming next.

Small firms employ about 62 million Americans, nearly half the U.S. workforce.

Data from Intuit and QuickBooks show job declines in 19 of 20 states last month, led by leisure and hospitality.

The slowdown is spreading fast and now showing up in national hiring data.

U.S. employers announced plans to add just 117,000 jobs in September, the weakest September reading in 14 years.

So far this year, planned hiring totals only 205,000 jobs, the lowest since the 2008 financial crisis.

All signs point to one direction: a pickup in layoffs is coming.

The Fed’s rate hikes since 2022 have hit small businesses far harder than big corporations.

Large firms borrow cheap or use cash.

Small firms depend on bank loans and those got pricey fast. Interest costs jumped from under 7% to nearly 8% of revenue, double big firms.

Half of small business loans now have variable rates meaning every Fed delay in cutting rates costs them more.

Goldman Sachs calls it a “bimodal maturity profile.”

Translation: half reset instantly, the rest just take longer to hurt. Either way, they’re all paying.

In July, 11% of small businesses said poor sales were their biggest problem, the highest since 2020.

That means customers are spending less, while costs keep rising.

Put simply: small businesses are earning less and paying more to borrow money. That combo usually ends with layoffs.

Half of America works for small businesses, which make up about 44% of U.S. GDP.

Yet when the economy slows, they’re the first to break.

S&P 500 companies employ just 18% of all workers, the rest depend on Main Street.

If small businesses fall, Wall Street won’t be far behind.