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Data: Facebook Global State of Small Business Report; Chart: Axios Visuals

Nearly a third of small- and medium-sized businesses have had to lay off workers as a result of the COVID-19 pandemic, and half say they don't plan to rehire employees in the next six months, per Facebook's Global State of Small Business Report out Friday.

Why it matters: Small businesses have been pummeled in the past year, and small businesses owned by people of color faced higher closure rates, lower sales and bigger staff reductions.

By the numbers: 22% of U.S. businesses reported they were closed in February 2021, an increase from 16% in October 2020, per Facebook's survey of more than 35,000 small- and medium-sized businesses.

  • "Businesses have reduced their costs and payroll which is horribly painful and could be really harmful to the business long term," Urban Institute Senior Fellow Brett Theodos tells Axios.

Between the lines: The fact that 51% of global and U.S. small- and medium-sized businesses aren't planning to rehire in the near future suggests lower levels of optimism about the economic recovery, even as vaccinations become more widespread and states begin to open up.

  • States with high shares of businesses that reduced staff are New York (38%), Illinois (36%), Michigan (36%), California (33%) and Florida (32%), per Facebook's research.

Yes, but: While small businesses may not be planning on scaling rapidly in the second half of the year, some sectors are doing better than expected in terms of keeping up with loan payments and maintaining their credit standing, said Theodos, who analyzed data from Dun & Bradstreet on 1 million businesses between September 2019 and January 2021.

  • Small businesses are nimble and many were able to quickly cut costs by shedding employees and physical space to save on rent when revenues plummeted at the start of the pandemic, he said.
  • The Paycheck Protection Program and flexibility from lenders significantly helped provide some financial float for small businesses over the past year.

Yes, but, but: That doesn't mean their recovery will be quick or easy, and many businesses that closed may not be able to reopen.

  • Theodos found that past-due payments owed by small businesses as a share of each company's total trade activity rose slightly nationwide — from 17.7% in February 2020 to 18.3% percent in January 2021. (Check out the city-specific data).
  • Companies that are in loan forbearance may not be in great financial shape, "but it means lenders still have some confidence they'll be able to pay," he said.

The bottom line: Even the businesses that managed to maintain operations thanks to PPP payments and emergency lender flexibility will likely be conservative in hiring and spending for some time.

Go deeper

Updated 4 mins ago - World

Over 70 dead in worst bombardments between Israel and Hamas for years

Palestinian Muslims exchange wishes for Eid al-Fitr, marking the end of the fasting month of Ramadan, near a razed building in the northern Gaza Strip town of Beit Lahia, on May 13. Israeli forces said they had killed a senior Hamas commander in May 12 airstrikes. Gaza's health ministry said children died in the strikes. Photo: Majdi Fathi/NurPhoto via Getty Images

At least 67 Palestinians and seven Israelis have been killed in fighting between Israel's military and Hamas since Monday, per Reuters.

The big picture: The worst aerial exchanges of fire between Israel and Hamas since 2014 continued into early Thursday. It comes days after escalating violence in Jerusalem that injured hundreds of Palestinians and several Israeli police officers during protests over the planned evictions of Palestinian families from their homes.

Biden admin grants Colonial waiver to ease fuel shortages

Fuel tanks at Colonial Pipeline Baltimore Delivery in Baltimore, Maryland on Monday. Photo: Jim Watson/AFP via Getty Images

The Biden administration approved a temporary waiver of shipping requirements late Wednesday to help Colonial Pipeline transport fuel, as service resumes across the U.S. following a ransomware attack that that took it offline last week.

Why it matters: The century-old Jones Act requires ships to be built in the U.S. and crewed by American workers, but the waiver means foreign companies can transport gasoline and diesel to areas where there are fuel shortages.

Updated 4 hours ago - Politics & Policy

Don McGahn agrees to closed-door interview with House panel on Russia report

Former White House counsel Don McGahn during a discussion at the NYU Global Academic Center in Washington, D.C., in 2019. Photo by Alex Wong/Getty Images

Former White House counsel Don McGahn agreed Wednesday to speak with the House Judiciary Committee about former President Trump's alleged attempts to obstruct the Russia investigation — with certain conditions, per a court filing.

Why it matters: The agreement ends a two-year standoff after McGahn, a key player in former special counsel Robert Mueller's investigation, repeatedly refused to agree to a subpoena for testimony — resulting in the matter being taken to court.