US business hiring drops to 7-year low as Trump's trade wars weigh on economy

Mike Segar/Reuters

• A measure of hiring by US businesses fell to the lowest level in seven years in the third quarter as trade tensions increasingly weighed on the economic outlook.
• The National Association of Business Economists said in a survey released Monday that just one-fifth of companies hired more workers over the past three months.
• "Higher tariffs are disrupting business conditions, especially in the goods-producing sector," one NABE economist said.
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A measure of hiring by US businesses fell to the lowest level in seven years in the third quarter as trade tensions increasingly weighed on the economic outlook.

In a survey released Monday, the National Association of Business Economists said one-fifth of companies hired more workers over the past three months. That was compared with one in three in July and brought the gauge to its weakest point since 2012.

The decline was at least partly driven by trade disputes between the Trump administration and major economies, the business economists said. Tariffs have dimmed the outlook for an economy that had already been expected to slow this year.

"The US economy appears to be slowing, and respondents expect still slower growth over the next 12 months," said Constance Hunter, the president of NABE and the chief economist at the accounting firm KPMG. "Higher tariffs are disrupting business conditions, especially in the goods-producing sector."

Tariffs levied over the past year have raised costs for companies and cast uncertainty on investment plans, the survey said, leading to weaker sales and anemic profit margins. While the US and China delayed planned economic escalations this month, the two sides maintained tariffs on thousands of each other's products.

"Notably, fewer respondents reported increased capital spending on equipment and information technology at their firms than at any time in the past five years," said Sam Kyei, the chair of the survey and the chief economist at SAK Economics LLC.

Further, a cooler job market weighed on wage gains in the third quarter. One-third of economists said firms have raised pay over the past three months, compared with more than half at the same time a year earlier.

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