For the first time in 121 months of leading the world's economy, the U.S. economy showed small signs of a slowdown, largely due to a strain in the manufacturing sector. Economists noted that the China-U.S. trade war had something to do with the subtle slowdown.
According to CBS News, economic experts are still concerned about the American economy even if it has been growing steadily for 121 months in a row. The trade war with China is believed to have impacted manufacturing activities in the country over the last year.
In a note released on Tuesday, Oxford Economics experts noted that the slowdown in U.S. manufacturing activities was affected by escalating trade tensions that were initiated in May. "Manufacturing activity is undeniably cooling amid dissipating fiscal stimulus, escalated trade tensions and sluggish global growth," they said.
Aside from a weakening in global orders, employment also slowed down. Manufacturing companies started cutting down on hiring due to slower production brought about by reduced orders.
Economic analysts also suggested that the U.S. economy's trivial strains as impacted by slowing manufacturing orders may be a result of companies from other countries opting to hold back on orders from American firms amid the trade war.
Multiple outlets reported that manufacturing slowed to its lowest in almost three years for the first time in June. During the said month, uncertainties over the China-U.S. trade war beat down on orders that further pulled down figures, Reuters reported.
The numbers were down despite the U.S. economy expanding for the last couple of years. Due to the showdown of words between Beijing and Washington for the month of June, some companies cut down on orders and production.
Many companies are trying to play safely in the trade war that has since been eased following the meeting of Chinese President Xi Jinping and U.S. President Donald Trump at the G20 Summit during the weekend.
Some economists are expecting the U.S. economy and manufacturing segments to recover now that both sides decided to hold off on tariff impositions. Analysts are also looking forward to improvements in the global stock market as the two leaders try to settle differences in trade and technology.
Business Insider noted that Trump pledged to boost U.S. manufacturing. Unfortunately, his trade war with China pulled down the numbers that could have helped further propel the American economy.
On the other hand, hopes are high for an economic revival not just in the U.S. but also around the world. While no trade deal was reached during the Xi-Trump meeting, economists are expecting improvements in various sectors as both sides agreed to a tariff truce.
