John Haltiwanger featured in Barron's on New Economic Indicators during COVID-19 Pandemic
Lisa Beilfuss, an economic reporter writing for Barron's, just published an article on how the two newly introduced economic indicators have predicted the U.S. economy during the Coronavirus pandemic: 1) Weekly Economic Index, or WEI, developed by a team at the New York Federal Reserve, and 2) weekly new business formation, a measure Census has started to use.
Faculty Associate John Haltiwanger, professor from the Department of Economics, argues that it’s not surprising that fewer new-business applications are being filed during a pandemic. "But it is nonetheless important. Small businesses employ about half of working Americans, and new employers and young businesses are a primary source of job creation in the U.S.," Haltiwanger added.
While there’s been lots of attention on the massive losses in jobs from layoffs in recent weeks, Haltiwanger suggests it’s important to also look at the other side of the employment picture--net job creation. "Net job creation reflects both hires and separations, and a sharp decline in business startups has adverse implications for near term and longer term job creation," Haltiwanger said.