NEW YORK — Stocks fell sharply Wednesday after the Federal Reserve indicated the end may be near for its economy-crunching hikes to interest rates, but it also doesn’t expect to cut rates soon despite Wall Street’s hopes.
The S&P 500 fell 1.6% in its first drop in three days. The Dow Jones Industrial Average lost 530 points, or 1.6%, while the Nasdaq composite dropped 1.6%.
Some of the sharpest drops came again from the banking industry, where investors are worried about the possibility of customers yanking their cash and causing more collapses. They slid after Treasury Secretary Janet Yellen said Wednesday she’s not considering blanket protection for all depositors at all banks, unless they present a risk to the overall system.
Stocks of smaller- and mid-sized banks fell sharply. First Republic Bank dropped 15.5%, and PacWest Bancorp. fell 17.1%.
People are also reading…
Stocks saw little change for much of the day, before the Fed raised its key rate by a quarter of a percentage point in its campaign to drive down inflation. The bigger question was where the Fed is heading next. The Fed hinted it may not hike rates much more as it assesses the fallout from the banking industry’s crisis.
Instead of repeating its statement that “ongoing increases will be appropriate,” the Fed said Wednesday it now only sees “some additional policy firming may be appropriate.”
The Fed also released the latest set of projections from its policymakers on where rates are heading in upcoming years. The median forecast had the federal funds rate sitting at 5.1% at the end of this year, up a smidge from where it currently sits, in a range of 4.75% to 5%.
That’s also the same level as seen in December, and it’s counter to worries in the market that it could rise given how stubborn high inflation has remained.
That helped send yields slumping in the bond market, which has been home to some of the wildest action this month.
The yield on the two-year Treasury, which tends to track expectations for the Fed, tumbled to 3.96% from 4.13% just before the projections were released. It was above 5% earlier this month.
All told, the S&P 500 fell 65.90 points to 3,936.97. The Dow dropped 530.49 to 32,030.11, and the Nasdaq fell 190.15 to 11,669.96.
Some of the biggest excitement was around what are called “meme stocks.”
GameStop shot up 35.2% after it reported a surprise profit for its latest quarter. Analysts were expecting another loss for the struggling video-game retailer. In early 2021, hordes of smaller-pocketed and novice investors piled into the stock, sending its price surging.
States with the highest rates of small business employment
States with the highest rates of small business employment
2021 was a record year for people deciding to work for themselves, with 5.4 million new business applications nationwide—and 2022 has followed close on its heels. Though not all companies will have employees, the surge could lead to a rise in small business jobs in years to come.
This analysis defines small businesses as having fewer than 500 employees, which comprise more than 99% of businesses nationwide. There were more than 6 million of them in the U.S. in 2019, the most recent year of the Census Bureau’s Statistics of U.S. Businesses. These small businesses employed about 61.7 million people—a little less than half of all private workers—and paid nearly $3 trillion in wages.
Swyft Filings used Census Bureau data to identify which states have the highest rates of small businesses employment. States are ranked by the percentage of employees who worked at small businesses in 2019. The data excludes nonemployer businesses, private households, railroads, agricultural production, and most government entities.
Small businesses employ less than half of the private workforce in most states
Nationally, 46% of employees worked for small businesses in 2019. Most states are close within that range, as well. But there are some notable exceptions.
In much of the northwest quadrant of the country, small companies held a larger share of total employees. Montana led the nation, with about 2 in 3 employees working for small bsuinesses—surpassing the national average by 20 percentage points. Leading small business industries for Montana and neighboring states include construction, professional/scientific/technical services, and real estate/leasing, according to the Small Business Association (SBA).
The relatively low cost of living in the Midwest and Mountain regions means small businesses can afford to employ more people than in states with higher living expenses or where they have to compete with larger, high-paying corporations. Montana’s companies benefit from its quality-of-life characteristics, such as work-life balance, outdoor activities, and the landscape’s natural beauty, according to a Montana High Tech Business Alliance survey.
Vermont and Maine also stood out, particularly within the Northeast. Again, the largest industries for small businesses were construction and professional/scientific/technical services, according to the SBA. Most Vermont small businesses are sole proprietorships or unincorporated businesses with a single owner who may or may not have employees.
US averages about 22 employees per business
Small businesses have 500 employees or less, but most are considerably smaller. Nearly 9 in 10 of all U.S. companies have fewer than 20 employees. On average, U.S. companies have about 22 employees.
The highest statewide average employment per business is 28 in Washington D.C. Again, the northern Mountain region maintains the lowest averages, namely in Montana, Idaho, and Wyoming, with Vermont following closely behind.
Business applications, including probable employers, surged in 2021
Of the 5.4 million business applications in 2021, nearly 1.8 million were likely employers. That’s more than any single year in the past 15 years. Through November 2022, about 1.5 million more applications were deemed likely to become employers.
The Census uses a variety of factors to determine likely employers (formally called high-propensity business applications). Considerations include whether an application comes from an existing corporate entity, whether it indicates a hiring plan or planned wages, and if it’s within a handful of industries that typically go on to employ others, such as accommodation, food services, manufacturing, or retail.
Startups are critical to innovation, job creation, and productivity. Though applications—likely employers or not—won’t all materialize into companies, historically, startup activity has followed business application trends fairly closely. There’s a good chance more companies, and in turn, small business jobs, will continue to grow in the months and years to come.
#51. Florida
– Share of workers employed by small businesses: 40.5% (3.6 million)
– Share of businesses that are small: 98.9% (465,494)
– Annual payroll of small businesses: $154.9B (36.3% of state’s private payroll)
– 2022 small business applications through November: 558,818 (34.3% likely to become employers)
#50. Tennessee
– Share of workers employed by small businesses: 42.2% (1.2 million)
– Share of businesses that are small: 96.5% (97,229)
– Annual payroll of small businesses: $49.0B (37.7% of state’s private payroll)
– 2022 small business applications through November: 84,415 (33.1% likely to become employers)
#48. Arizona (tie)
– Share of workers employed by small businesses: 42.5% (1.1 million)
– Share of businesses that are small: 97.0% (110,403)
– Annual payroll of small businesses: $48.2B (37.2% of state’s private payroll)
– 2022 small business applications through November: 105,966 (29.7% likely to become employers)
#48. Georgia (tie)
– Share of workers employed by small businesses: 42.5% (1.7 million)
– Share of businesses that are small: 97.6% (181,536)
– Annual payroll of small businesses: $76.3B (35.9% of state’s private payroll)
– 2022 small business applications through November: 252,191 (27.7% likely to become employers)
#47. Nevada
– Share of workers employed by small businesses: 42.8% (540,004)
– Share of businesses that are small: 95.6% (52,368)
– Annual payroll of small businesses: $23.5B (40.4% of state’s private payroll)
– 2022 small business applications through November: 57,290 (28.5% likely to become employers)
#46. South Carolina
– Share of workers employed by small businesses: 43.0% (837,615)
– Share of businesses that are small: 96.7% (82,820)
– Annual payroll of small businesses: $32.2B (38.6% of state’s private payroll)
– 2022 small business applications through November: 83,645 (26.6% likely to become employers)
#45. Kentucky
– Share of workers employed by small businesses: 43.3% (722,253)
– Share of businesses that are small: 96.1% (64,723)
– Annual payroll of small businesses: $27.9B (37.2% of state’s private payroll)
– 2022 small business applications through November: 42,973 (29.7% likely to become employers)
#44. Indiana
– Share of workers employed by small businesses: 43.8% (1.2 million)
– Share of businesses that are small: 96.9% (106,588)
– Annual payroll of small businesses: $50.6B (38.2% of state’s private payroll)
– 2022 small business applications through November: 76,795 (30.5% likely to become employers)
#43. North Carolina
– Share of workers employed by small businesses: 44.4% (1.7 million)
– Share of businesses that are small: 97.8% (178,487)
– Annual payroll of small businesses: $71.7B (36.8% of state’s private payroll)
– 2022 small business applications through November: 150,702 (30.4% likely to become employers)
#42. Texas
– Share of workers employed by small businesses: 44.5% (4.9 million)
– Share of businesses that are small: 98.6% (452,239)
– Annual payroll of small businesses: $233.3B (38.2% of state’s private payroll)
– 2022 small business applications through November: 428,385 (30.7% likely to become employers)
#40. Ohio (tie)
– Share of workers employed by small businesses: 44.7% (2.2 million)
– Share of businesses that are small: 97.7% (179,051)
– Annual payroll of small businesses: $93.7B (38.4% of state’s private payroll)
– 2022 small business applications through November: 129,404 (27.6% likely to become employers)
#40. Illinois (tie)
– Share of workers employed by small businesses: 44.7% (2.5 million)
– Share of businesses that are small: 98.1% (251,107)
– Annual payroll of small businesses: $126.9B (39.0% of state’s private payroll)
– 2022 small business applications through November: 156,745 (36.8% likely to become employers)
#39. Missouri
– Share of workers employed by small businesses: 45.3% (1.2 million)
– Share of businesses that are small: 97.3% (113,475)
– Annual payroll of small businesses: $47.4B (37.8% of state’s private payroll)
– 2022 small business applications through November: 74,692 (29.3% likely to become employers)
#38. Massachusetts
– Share of workers employed by small businesses: 45.4% (1.5 million)
– Share of businesses that are small: 97.7% (141,939)
– Annual payroll of small businesses: $90.9B (38.0% of state’s private payroll)
– 2022 small business applications through November: 65,865 (39.5% likely to become employers)
#37. Utah
– Share of workers employed by small businesses: 45.5% (625,571)
– Share of businesses that are small: 96.9% (68,371)
– Annual payroll of small businesses: $27.1B (40.1% of state’s private payroll)
– 2022 small business applications through November: 59,709 (28.5% likely to become employers)
#34. Minnesota (tie)
– Share of workers employed by small businesses: 46.0% (1.3 million)
– Share of businesses that are small: 97.5% (116,317)
– Annual payroll of small businesses: $57.8B (37.6% of state’s private payroll)
– 2022 small business applications through November: 56,372 (32.8% likely to become employers)
#34. Virginia (tie)
– Share of workers employed by small businesses: 46.0% (1.6 million)
– Share of businesses that are small: 97.6% (151,283)
– Annual payroll of small businesses: $79.1B (40.1% of state’s private payroll)
– 2022 small business applications through November: 113,544 (28.7% likely to become employers)
#34. Mississippi (tie)
– Share of workers employed by small businesses: 46.0% (441,099)
– Share of businesses that are small: 95.8% (42,411)
– Annual payroll of small businesses: $15.7B (41.5% of state’s private payroll)
– 2022 small business applications through November: 51,288 (30.3% likely to become employers)
#33. Pennsylvania
– Share of workers employed by small businesses: 46.2% (2.6 million)
– Share of businesses that are small: 98.1% (226,511)
– Annual payroll of small businesses: $115.8B (39.3% of state’s private payroll)
– 2022 small business applications through November: 128,239 (30.4% likely to become employers)
#32. Iowa
– Share of workers employed by small businesses: 46.6% (644,100)
– Share of businesses that are small: 96.8% (61,192)
– Annual payroll of small businesses: $26.4B (41.4% of state’s private payroll)
– 2022 small business applications through November: 27,793 (30.3% likely to become employers)
#31. Alabama
– Share of workers employed by small businesses: 46.8% (822,668)
– Share of businesses that are small: 96.4% (71,997)
– Annual payroll of small businesses: $33.7B (42.4% of state’s private payroll)
– 2022 small business applications through November: 65,708 (27.5% likely to become employers)
#30. Arkansas
– Share of workers employed by small businesses: 47.2% (497,605)
– Share of businesses that are small: 96.3% (49,321)
– Annual payroll of small businesses: $18.5B (39.9% of state’s private payroll)
– 2022 small business applications through November: 34,686 (31.1% likely to become employers)
#29. Delaware
– Share of workers employed by small businesses: 47.4% (195,792)
– Share of businesses that are small: 93.4% (19,768)
– Annual payroll of small businesses: $9.7B (40.5% of state’s private payroll)
– 2022 small business applications through November: 41,852 (31.8% likely to become employers)
#28. Colorado
– Share of workers employed by small businesses: 47.6% (1.2 million)
– Share of businesses that are small: 97.6% (140,662)
– Annual payroll of small businesses: $58.3B (41.0% of state’s private payroll)
– 2022 small business applications through November: 106,527 (32.8% likely to become employers)
#26. California (tie)
– Share of workers employed by small businesses: 47.9% (7.4 million)
– Share of businesses that are small: 99.2% (783,945)
– Annual payroll of small businesses: $415.0B (38.5% of state’s private payroll)
– 2022 small business applications through November: 448,998 (42.3% likely to become employers)
#26. Michigan (tie)
– Share of workers employed by small businesses: 47.9% (1.9 million)
– Share of businesses that are small: 98.0% (170,405)
– Annual payroll of small businesses: $85.4B (42.0% of state’s private payroll)
– 2022 small business applications through November: 125,765 (28.0% likely to become employers)
#25. New York
– Share of workers employed by small businesses: 48.1% (4.1 million)
– Share of businesses that are small: 98.9% (461,206)
– Annual payroll of small businesses: $230.1B (38.2% of state’s private payroll)
– 2022 small business applications through November: 275,163 (41.3% likely to become employers)
#24. Connecticut
– Share of workers employed by small businesses: 48.2% (741,920)
– Share of businesses that are small: 96.7% (68,118)
– Annual payroll of small businesses: $39.5B (39.4% of state’s private payroll)
– 2022 small business applications through November: 41,152 (29.2% likely to become employers)
#23. Nebraska
– Share of workers employed by small businesses: 48.3% (413,735)
– Share of businesses that are small: 96.3% (42,117)
– Annual payroll of small businesses: $17.0B (43.1% of state’s private payroll)
– 2022 small business applications through November: 18,981 (31.1% likely to become employers)
#21. West Virginia (tie)
– Share of workers employed by small businesses: 48.6% (269,473)
– Share of businesses that are small: 94.9% (24,717)
– Annual payroll of small businesses: $9.9B (41.6% of state’s private payroll)
– 2022 small business applications through November: 12,709 (31.4% likely to become employers)
#21. Washington DC (tie)
– Share of workers employed by small businesses: 48.6% (257,236)
– Share of businesses that are small: 92.3% (17,326)
– Annual payroll of small businesses: $19.4B (43.3% of state’s private payroll)
– 2022 small business applications through November: 13,143 (26.8% likely to become employers)
#20. Wisconsin
– Share of workers employed by small businesses: 48.8% (1.3 million)
– Share of businesses that are small: 97.3% (105,731)
– Annual payroll of small businesses: $53.3B (40.7% of state’s private payroll)
– 2022 small business applications through November: 59,192 (29.8% likely to become employers)
#19. New Jersey
– Share of workers employed by small businesses: 49.2% (1.9 million)
– Share of businesses that are small: 98.2% (191,253)
– Annual payroll of small businesses: $96.6B (40.3% of state’s private payroll)
– 2022 small business applications through November: 141,760 (29.2% likely to become employers)
#18. Hawaii
– Share of workers employed by small businesses: 49.3% (272,459)
– Share of businesses that are small: 96.0% (24,677)
– Annual payroll of small businesses: $11.6B (44.9% of state’s private payroll)
– 2022 small business applications through November: 17,109 (31.1% likely to become employers)
#17. Maryland
– Share of workers employed by small businesses: 49.4% (1.2 million)
– Share of businesses that are small: 97.3% (107,212)
– Annual payroll of small businesses: $61.2B (44.7% of state’s private payroll)
– 2022 small business applications through November: 91,187 (29.0% likely to become employers)
#15. New Hampshire (tie)
– Share of workers employed by small businesses: 49.7% (308,296)
– Share of businesses that are small: 95.4% (29,544)
– Annual payroll of small businesses: $15.2B (45.9% of state’s private payroll)
– 2022 small business applications through November: 12,779 (31.3% likely to become employers)
#15. Kansas (tie)
– Share of workers employed by small businesses: 49.7% (601,426)
– Share of businesses that are small: 96.0% (55,101)
– Annual payroll of small businesses: $24.9B (43.6% of state’s private payroll)
– 2022 small business applications through November: 28,611 (34.2% likely to become employers)
#14. Washington
– Share of workers employed by small businesses: 49.8% (1.4 million)
– Share of businesses that are small: 98.0% (156,575)
– Annual payroll of small businesses: $74.4B (38.9% of state’s private payroll)
– 2022 small business applications through November: 81,691 (33.1% likely to become employers)
#13. Oklahoma
– Share of workers employed by small businesses: 51.1% (718,033)
– Share of businesses that are small: 96.8% (70,983)
– Annual payroll of small businesses: $29.0B (44.5% of state’s private payroll)
– 2022 small business applications through November: 50,743 (30.5% likely to become employers)
#12. Rhode Island
– Share of workers employed by small businesses: 51.2% (227,699)
– Share of businesses that are small: 95.1% (23,244)
– Annual payroll of small businesses: $10.5B (46.2% of state’s private payroll)
– 2022 small business applications through November: 10,060 (33.0% likely to become employers)
#11. Alaska
– Share of workers employed by small businesses: 52.3% (138,517)
– Share of businesses that are small: 96.1% (16,691)
– Annual payroll of small businesses: $7.5B (45.5% of state’s private payroll)
– 2022 small business applications through November: 7,788 (35.2% likely to become employers)
#10. Louisiana
– Share of workers employed by small businesses: 52.7% (905,726)
– Share of businesses that are small: 97.1% (79,135)
– Annual payroll of small businesses: $38.7B (47.0% of state’s private payroll)
– 2022 small business applications through November: 74,272 (26.9% likely to become employers)
#9. New Mexico
– Share of workers employed by small businesses: 53.7% (346,374)
– Share of businesses that are small: 95.1% (32,776)
– Annual payroll of small businesses: $13.7B (48.7% of state’s private payroll)
– 2022 small business applications through November: 24,845 (28.0% likely to become employers)
#8. Oregon
– Share of workers employed by small businesses: 54.4% (893,405)
– Share of businesses that are small: 97.5% (94,568)
– Annual payroll of small businesses: $39.3B (44.9% of state’s private payroll)
– 2022 small business applications through November: 45,738 (33.5% likely to become employers)
#7. North Dakota
– Share of workers employed by small businesses: 55.7% (196,770)
– Share of businesses that are small: 95.2% (18,867)
– Annual payroll of small businesses: $9.1B (49.9% of state’s private payroll)
– 2022 small business applications through November: 7,460 (31.5% likely to become employers)
#5. Maine (tie)
– Share of workers employed by small businesses: 56.3% (293,748)
– Share of businesses that are small: 96.6% (33,300)
– Annual payroll of small businesses: $12.0B (49.7% of state’s private payroll)
– 2022 small business applications through November: 11,974 (37.0% likely to become employers)
#5. Idaho (tie)
– Share of workers employed by small businesses: 56.3% (347,193)
– Share of businesses that are small: 96.6% (41,174)
– Annual payroll of small businesses: $13.1B (48.4% of state’s private payroll)
– 2022 small business applications through November: 27,513 (32.8% likely to become employers)
#4. South Dakota
– Share of workers employed by small businesses: 58.0% (208,353)
– Share of businesses that are small: 95.8% (21,473)
– Annual payroll of small businesses: $8.0B (51.0% of state’s private payroll)
– 2022 small business applications through November: 9,695 (32.5% likely to become employers)
#3. Vermont
– Share of workers employed by small businesses: 60.2% (157,131)
– Share of businesses that are small: 95.6% (16,962)
– Annual payroll of small businesses: $6.7B (56.3% of state’s private payroll)
– 2022 small business applications through November: 6,938 (33.6% likely to become employers)
#2. Wyoming
– Share of workers employed by small businesses: 64.1% (132,595)
– Share of businesses that are small: 95.6% (17,777)
– Annual payroll of small businesses: $5.9B (56.6% of state’s private payroll)
– 2022 small business applications through November: 37,992 (21.9% likely to become employers)
#1. Montana
– Share of workers employed by small businesses: 66.8% (250,680)
– Share of businesses that are small: 97.2% (32,614)
– Annual payroll of small businesses: $9.6B (60.1% of state’s private payroll)
– 2022 small business applications through November: 19,064 (31.3% likely to become employers)
This story originally appeared on Swyft Filings and was produced and distributed in partnership with Stacker Studio.
