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US-China trade war tariffs hurting American companies

Trump’s Tariff Hikes Hurt US Companies’ Employment, Wage Growth Plans: NABE

Posted Monday, October 28, 2019 by
Arslan Butt • 1 min read

A recent survey by the National Association for Business Economics reveals that hiring by US companies is on the decline even as wage growth among them has come down. 69% of US companies added no new jobs in the past three months, higher than the 57% companies that added no new jobs back in July.

A measure of job gains in the survey declined to the lowest levels seen in seven years. Slower growth in sales and profits on account of the US-China trade war have emerged as the key reasons for the decline in hiring among American companies surveyed. The hiked tariffs have cut into firms’ profits and impacted sales, forcing many businesses to put off adding more staff.

In addition, fears of weaker economic growth and a possible recession in the US economy are making businesses more reluctant to implement significant pay hikes for their employees. Only around 33% of companies had hiked their employees’ salaries over the past three months, despite US’s unemployment rate falling to a 50-year low.

Only 39% of economists surveyed by the NABE also indicated a growth in sales in US companies, significantly lower than the 61% who indicated sales growth during the same period last year. In addition, only 38% expected sales to pick up over the next three months, as opposed to 61% who felt this way during October 2018.

Trump’s decision to impose tariffs on Chinese imports have worsened business conditions, according to 35% of the survey respondents. Profit margins have climbed higher only for around 19% of companies, compared to 37% who reported higher profit margins for the same period in the previous year.

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