On Labor Day 2021, the end of enhanced unemployment benefits bring hope to US small businesses

Labor Day is traditionally an opportunity to recognize the contributions made by workers, but this year it's small businesses that are celebrating. That's because this Labor Day coincides with the end of enhanced federal unemployment benefits that were paying people not to work. These payouts have contributed to a record labor shortage that prevents small businesses from bringing the economy back. Oxford Economics estimates that roughly 11.2 million Americans will lose some form of federal unemployment benefits this week. This will help fill the 10.1 million available jobs nationwide. 

On Friday, the Labor Department released its August jobs report, showing that only 235,000 jobs were created in the month -- a huge miss from economists' expectations of around 750,000. There are still 5.3 million fewer people working than before the pandemic. On Thursday, the Labor Department announced its weekly jobless claims numbers, which suggest that overly generous unemployment benefits are to blame for this labor market slack. They show that about 60 percent more Americans filed continued unemployment claims in late August than in early 2020.