Moody's Analytics believes that President Donald Trump's trade war has already cost the United States 300,000 jobs, and that number could continue to spike if the conflict continues, according to a new report from Yahoo News.
The economic forecasting firm projects that total job losses could hit 450,000 by the end of 2019 if the trade war continues unabated, and by the end of 2020, the figure could reach 900,000. These job loss figures count both positions that were ended due to the trade war and those that would have been created had the tariff policy not been in effect. For this reason, the numbers are necessarily debatable.
But economists largely agree that the trade war has imposed a serious burden on the United States' economy, and many believe it risks sending us into a recession. And the Yahoo News report noted that related data bolsters Moody's analysis:
Employers have created 1.3 million jobs so far this year, down from 1.9 million during the same period in 2018. The manufacturing sector has actually contracted, with many producers struggling with higher prices caused by Trump’s tariffs. Business investment is growing by the smallest amount since late 2016.
And it's far from the first sign that the U.S. economy has entered a worrying period. The latest jobs report, while not disastrous, showed that the economy only added a weak and disappointing 130,000 jobs in August.
Tiana Lowe, writing for the generally conservative Washington Examiner, noted on Friday why this report was a let-down:
For one thing, 25,000 of those 130,000 jobs are temporary ones created by the government for the sole purpose of the 2020 census. For another, the BLS revised downward the reported employment gains in the already mediocre June and July jobs reports by a cumulative 20,000 jobs. Still, the average jobs gains in the past three months are 156,000 per month, meaning that August constituted a slight but sure drop....
Without the Census Bureau adding temporary canvassers and given the continued slow bleed of jobs in pivotal economic sectors, including retailers, transportation, and warehousing, this jobs report would be worse than weak. All things being equal, employment growth in 2019 will be the worst since 2010, all while Trump is increasing the number of people employed by the government.
The economic news isn't all gloomy. As Lowe noted, wage growth seemed to be above expectations last month, and unemployment overall remains low.
But Trump has tried to sell his reelection based on his economic performance. As I've argued repeatedly, this is largely based on a myth: People often erroneously give president's credit for the state of the economy, even when it is largely driven by factors outside the White House's control.
In this case, though, Moody's analysis suggests that Trump really is hurting the economy through his actions as president, and many fewer Americans have jobs because of it. Arguably, these lost and foregone jobs might be worth it if the benefits of the trade war were substantial, but it's far from clear there has been or will be any real gains for the United States fro Trump's reckless posturing. For now, we're just stuck with the losses and empty promises.
