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In August, compared to July, fewer small businesses were open and busy by the hour, suggesting the Covid-19 Delta variant could dampen the US economic recovery, according to data from Homebase, which provides employee planning software to employers.

The number of employees fell by 4% in mid-August compared to mid-July, according to Homebase, which analyzed trends in around 60,000 companies and 1 million hourly workers. The proportion of businesses with open doors also fell by 2.5% during this period.

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The monthly shifts are remarkable, as the economic indicators have generally been pointing upwards since April, according to John Waldmann, founder and CEO of the company.

“The leading indicators for Main Street health and hourly employment here show a real change from the trends at the beginning of summer and what appears to be a very clear impact of the Delta variant on the economy,” he said.

Delta variant

Covid cases, hospital admissions and deaths rose steadily in July and August, fueled by the Delta variant and mostly occurring in unvaccinated people.

By the end of August, there were an average of around 150,000 new Covid cases a day, according to the Centers for Disease Control and Prevention, up from around 14,000 on July 1. (The falls appear to have flattened out in the past few days.)

The number of virus-related deaths has also almost quadrupled during this period from 226 to an average of almost 1,000 per day, according to the CDC.

According to CDC data, about 63% of adults in the US are fully vaccinated. This applies to about 52% of the total population, including children.

Consumer confidence

Consumer confidence fell to a six-month low in August, in part due to virus fears.

According to Jim Baird, a certified financial planner and chief investment officer at Plante Moran Financial Advisors in Portage, Michigan, the Conference Board’s consumer confidence index had reached its highest level since the first Covid outbreak in early 2020 in July.

“The advent of the Delta variant has overshadowed this optimism and led to a growing awareness that the risk of Covid-19 is not yet in the rearview mirror,” said Baird.

The delta variant can affect employees and the company in several ways, said Waldmann. Traffic and demand can drop when customers try to limit their personal activities; Corporations can respond to any internal virus case by downsizing or temporarily closing their doors, he said.

All but three states – Arizona, Maine, and South Dakota – saw employment declines in August as measured by the number of hourly employees with at least one stamp, Homebase said. The monthly decline was largest in the Southeast region – a 5.6% loss, more than double the 2.3% decline in New England, according to Homebase.

The decline in the number of employees has hit certain industries more than others. In entertainment and hospitality, for example, numbers were down 35% and 20%, respectively, from their highs in July, Homebase said.

Meanwhile, the number of private sector jobs rose 374,000 in August, according to ADP, well below the Dow Jones estimate of 600,000. The Bureau of Labor Statistics released its monthly job report on Friday.

The U.S. economy has still lost nearly 6 million jobs from pre-pandemic levels.