Is this a small business recession?

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First-time claims for unemployment insurance benefits headed higher last week—not a good sign for the strength of the economic recovery. Or should I say “recovery”? The Department of Labor numbers, out this morning, mark the fourth increase in the past five weeks and the highest rate of claims in nine months.

Another set of government data which came out yesterday sheds some interesting light on where those losses may be coming from. In a phrase: small businesses.

That’s not typically what you’d expect in a recovery. Small businesses are often given the credit for getting people back to work the fastest. But according to the Bureau of Labor Statistics’s Business Employment Dynamics report for the fourth quarter of 2009, 61.8% of all net job losses came from firms with one to 49 employees. Considering that those firms only employ 29% of workers, that’s pretty remarkable. A headline in today’s WSJ reads “Small Firms Lagging, With Bulk of Job Losses.”

Although it is important to keep in mind that such a conclusion depends on how you define “small.” In this paper, BLS economist Jessica Helfand looks at firms with 1 to 99 employees during the height of the recession and finds a less pronounced effect. She also compares the most recent recession to the past two, and comes to an interesting conclusion. While the 1990-91 recession was characterized by more pain at small firms, and large firms bore the brunt in the 2001 downturn, our most recent episode has ridden roughshod over firms of all sizes.

Which is kind of what it feels like here on the ground.