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Economic uncertainty

Business and consumer confident in NJ shattered by tariffs

By: Daniel Munoz
NorthJersey.com
USA Today Network - New Jersey

..... New Jersey businesses have already been seeing the effects of President Donald Trump's tariffs on imports over the past few weeks, sending business confidence to its lower level since the COVID-19 pandemic, consumer confidence plunging and panic-buying surging in anticipation of higher prices.
..... Meanwhile, layoffs in the first quarter of 2025 were double what they were during those same three months of 2024, according to state regulatory filings.
..... Even though the Federal Reserve lowered interest rates three times in 2024, its chairman Jerome Powell, said Wednesday [04/16/2025] cuts this year [2025] would have to wait given the economic uncertain.
..... "The business climate" in North Jersey "was much worse than normal, and firms were the most pessimistic they've been about the outlook since 2020" amid the pandemic, said Richard Deitz, an economic research adviser for the New York Federal Reserve in Manhattan.
..... Consumer confidence in March [2025] fell to its lowest level in 12 years as the pubic warily eyed a potential recession, according to The Conference Board, a business think tank.
..... March [2025] was the forth month in a row to see consumer confidence decline, said Conference Board senior economist Stephanie Guichard.
..... "Consumers' expectations were especially gloomy, with pessimism about future business conditions deepening and confidence about future employment prospects falling to a 12-eyar low," Guichared said in a statement.
..... Meanwhile, nationwide retail spending surged by 1.4% - the largest monthly jump i two years - the U.S. census Bureau reported on Wednesday, [04/16/2025] driven by fears that Trump's tariffs will increase prices in the near future.
..... "There is little doubt that tariffs will bey inflationary," said Neil Saunders, a retail analyst and managing director of GlobalData. "Paradoxically, this may actually make retail sales numbers look stronger as it will push up growth, but it will be deleterious on underlying volumes as consumers do not have the capacity to cope with further substantial price hikes."
..... Manufacturers in South Jersey, meanwhile, reported the largest decline in activity levels since the height of the COVID-19 pandemic in 2020, according to a survey of local manufactures released Thursday [04/17/2025] by the Philadelphia Federal Reserve.

Employers insincere pace of layoffs

..... Twenty-eight New Jersey businesses announced layoffs of a combined 3,618 workers in the first quarter of 2025, more than double the 1,753 layoff announced by 18 companies during the same period in 2024.
..... "When you're uncertain you're going to be safe rather than sorry," Tom Bracken, who heads the New Jersey Chamber of Commerce, said in an interview earlier this month. [04/2025]
..... That means layoffs, price hikes and pulling back on expansion and investment by businesses, Bracken said.
..... In April, [2025] three big-name New Jersey firms announced layoffs of hundreds of employees over the coming months. They are banking giant JP Morgan Chase, health insurance firm Cigna Evernorht Services and Reckitt backbencher group, the company that makes Lysol, Mucinex and Finish.
..... New Jersey's unemployment rate in March [2025] was 4.7%, ahivng gradually crept up over the past two and a half years from 3% in August 2020, but still a far cry from the 15.4% in May 2020 during the height of the pandemic.

In face of tariffs, businesses and consumers unsure what to do

..... Businesses are looking at how they can stock up on materials, supplies and other goods they think will be scarce or more expensive as a result of Trump's tariffs, said Vincent Vicari, who heads the Bergen County office of the New Jersey Small Business Development Center at Ramapo College in Mahwah.
..... "If we have prices that disruptively fluctuate, that erodes confidence in the marketplace," he said.
..... Business owners have tinkered with different ways to save money in recent years, especially since Trump took office.
..... Tina Pearson who owns the Edgewater hair stying business Tina Pearson Salon, said the salon has employed fewer staff dedicated to a single role - say front desk - and instead have each employee focused on several stations. Haircare products are made in-house which she said is cheaper.
..... But Persons has had to start sourcing some of her supplies domestically to avoid the worst of the looming traffics, which has paradoxically made things more expensive for the salon. So far, she hasn't increased prices.
..... Many people are spending more on retail goods in anticipation of tariffs, but less on discretionary spending such as restaurants and salons, said Carol Rauscher, president of North New Jersey Chamber of Commerce, based in Englewood.
..... "It may not be as bad as we think, because we don't know," she said. "Every day, stuff changes."

..... This Article contains material from USA Today

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