The Trade War's Impact On The U.S. Economy Is Being Debated The U.S. economy is still growing, but trade tensions have taken a toll — especially on factories and farms. The trade war's impact on the overall economy is being debated.
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How Hard Are Tariffs Hitting The Economy? It Depends On Who You Ask

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How Hard Are Tariffs Hitting The Economy? It Depends On Who You Ask

How Hard Are Tariffs Hitting The Economy? It Depends On Who You Ask

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NOEL KING, HOST:

The Labor Department released its monthly jobs report this morning. Employers added 266,000 jobs last month, which is better than expected and a sign that the U.S. economy continues to power ahead. With that record number of Americans working, it means a lot of people have money to spend. And so far, the holiday shopping season is off to a good start. But there are spots of weakness in the economy, especially in factories and farms. And the president's trade war is still making people nervous. NPR's Scott Horsley has the story.

SCOTT HORSLEY, BYLINE: The stock market got off to a rocky start this week when President Trump launched a new round of tariff threats. But administration loyalists insist concern about the trade war is overblown. In an interview with MORNING EDITION, Stephen Vaughn, former general counsel for the president's trade representative, argued Trump's tariff battles have not sidetracked a strong U.S. economy.

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STEPHEN VAUGHN: Record low unemployment, very - almost no inflation, strong markets and generally strong trade numbers. I think the policies are working very well.

HORSLEY: Unemployment is at a near record low, but the pace of hiring has slowed and so has economic growth. GDP growth in the third quarter barely topped 2%, and it's expected to slow further in the last three months of the year. Manufacturers have been especially hard hit. TV station WNEP reported on one factory layoff in Pennsylvania.

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UNIDENTIFIED REPORTER: We begin tonight in Northumberland County, where more than a hundred workers are being let go from their jobs for good.

HORSLEY: Similar job cuts are happening throughout the Midwest. Wisconsin factories lost 7,000 jobs in the first nine months of the year; Michigan - more than 4,000. Pennsylvania suffered the nation's biggest factory losses with 7,400 jobs cut.

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UNIDENTIFIED REPORTER: HCF industry says it is laying off 148 people at its plant in Milton permanently.

HORSLEY: James Dolan (ph) is one of the workers whose jobs are being eliminated at this Pennsylvania manufacturer of railroad cars.

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JAMES DOLAN: They want everybody out by the end of the year. I feel sorry for the guys in their 50s where they have to find something else.

HORSLEY: Factories, many of which depend on global supply chains and healthy export markets, are particularly vulnerable to the trade war. Services like hospitals and restaurants that cater to local customers are more insulated, though growth in that sector is slowing, as well. The other big weak spot is farming, which has suffered a one-two punch of bad weather, which makes it hard to grow crops, and tariffs that make it hard to sell what you do grow. In the 12 months ending in September, farm bankruptcies jumped 24% to their highest level since 2011.

GREG PITTMAN: There is a general anxiety.

HORSLEY: Greg Pittman is a bankruptcy attorney in La Crosse, Wis. That state led the nation in farm bankruptcies. Pittman says it's the tip of the iceberg since farmers usually resort to bankruptcy only after exhausting all other remedies.

PITTMAN: A lot of times, what we're seeing are facing foreclosures, lawsuits. Those are not fun times for anybody, especially farmers. And, you know, they've got a lot on the line.

HORSLEY: To be sure, farmers and factory workers are a small slice of the American workforce. Whether you see their troubles as a warning sign for the larger economy may depend on your political perspective. Richard Curtin of the University of Michigan surveys consumers about the economy every month. He says the gap between attitudes of Republicans and Democrats has never been wider.

RICHARD CURTIN: Democrats, as soon as Trump was elected, expected a recession. And they still expect a recession. And Republicans expected robust growth. And they still expect robust growth.

HORSLEY: Almost three years into the Trump presidency, Americans still view economic reality through very different partisan lenses. Scott Horsley, NPR News, Washington.

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