BLUEFIELD, W.Va (WVVA) - WVVA is helping to answer your questions about small business loans, unemployment, taxes, businesses reopening, and more. Every Wednesday, John O'Neal, Executive Director of the Mercer County Economic Development Authority, is helping answer questions.
WVVA: Small business is the backbone of our economy both locally and nationwide. how are our small businesses faring at this point in the recovery from the COVID-19 pandemic?
O'Neal: It is true that small business is the backbone of our economy. The vast majority of people in West Virginia work in a small business, and it was small business that was hit the hardest by COVID-19.
Recent economic reports indicate that small business is making a strong comeback. The biggest driver of our economy is consumer sales. Consumer spending rose again last month, and has returned to pre-pandemic levels. This has contributed to strong sales for small business which has had a very strong impact on employment. more on that in a moment.
August also was another good month for home sales, which indicates that many people are no longer in crisis mode, and are beginning to move on with their personal financial plans with confidence about the future.
WVVA: John, you mentioned that employment is improving. what is the latest on the jobs situation in our area?
O'Neal: The recent news is very good for our region, the state, and the country. In August, the Mercer County unemployment rate dropped a full percentage point, which translates to well over 200 people returning to work.
Each county in our region saw about the same level of improvement in the workforce. In West Virginia as a whole, over 8,200 people returned to work Last month. the state unemployment rate declined another full point to 8.9%.
In April there were 125,000 West Virginians receiving unemployment benefits. By the end of August that number had declined to 68,000. Nearly 60,000 West Virginians have gone back to work in the last couple of months. This is the most significant improvement in a four month period ever.
WVVA: What is the reason for the improvement?
O'Neal: There are a couple of major factors: first, the underlying fundamentals of our economy prior to the government imposed lockdowns were very good.
At the start of 2020 we had high growth with low taxes and historic good employment numbers. the fundamentals are still very good, all that was needed was for the lockdowns to ease.
Second, the generous COVID-19 unemployment benefit programs have expired. Congress approved a $600 per week unemployment bonus lasted for twelve weeks, and President Trump created a $400 per week extension that lasted for five additional weeks. Many people are returning back to work now that these programs have expired.
The West Virginia economy is rebounding very well back to its strong position prior to when the lockdowns were imposed.