Strong Jobs Report Eases Fears of Damage From Trade War

They are also worried about the trade war and its effect on global output. In a report to Congress on Friday, the Fed said it was seeing signs that uncertainty surrounding trade policy was leading companies to delay investment decisions, which could in turn slow economic growth.

At Taco Metals, a Miami-based manufacturer of equipment for the recreational marine industry, tariffs have meant higher costs for the raw materials and parts it imports from China and other countries. That has added to fears from boat builders and dealers about how long the good times can last in an industry that is highly sensitive to the broader economy.

“The tariffs just kind of forced people to think twice about is this going to continue,” said Bill Kushner, a vice president at the company. “There’s starting to be more hesitation on both the manufacturing side and the dealer side.”

As customers pull back, Mr. Kushner’s company, which employs about 150 workers in Florida and Tennessee, is doing the same. It is holding off on some equipment purchases and waiting to fill some positions.

“It’s just caused us to take a little step back and reassess some of the direction and make sure we’re not jumping the gun,” Mr. Kushner said. “It’s like, ‘Well, are we sure we’re going to need to do this, or should we try to outsource?’”

So far there is little evidence that those concerns are spreading beyond manufacturing to the broader economy. Hiring in the much larger services sector bounced back in June after unexpected weakness in May, and consumer confidence remains high. Tariffs were barely a topic of conversation at a big gathering of internet retailers in Chicago last week, said Jason Guggisberg, vice president for national accounts for Adecco, a staffing company.

“They’re very optimistic about a very great second half of this year,” he said. “They’re going to ride this economic wave as long as they can.”

Article source: https://www.nytimes.com/2019/07/05/business/economy/june-jobs-report.html?emc=rss&partner=rss