“We’re somewhat worried about what this type of uncertainty means for the economy going forward,” Torsten Slok, an economist at Deutsche Bank, told the WSJ.
For example, the U.S. labor market has been adding fewer jobs in states with high production of steel, aluminum, aircraft, cars and soybeans, according to Deutsche Bank. Signs are pointing to a slowodown in job creation in trade-sensitive industries, like industrials.
Furthermore, the trade talks has also increased the likelihood of higher end costs due to tariffs on international goods.
“We expect steel and other commodity costs to be a headwind all year,” Bradley Halverson, chief financial officer at Caterpillar Inc., said on an earnings call. Caterpillar joins other companies including Harley-Davidson Inc. and Polaris Industries Inc. in revealing over recent earnings calls that tariffs are driving up commodity prices that had already been climbing, and some expect to pass on costs to the end consumer.
For more information on the industrials sector, visit our industrials category.