Delayed tariff impact starting to hit, could cause companies to reduce head count in 2026

Economic Conditions - The ISM manufacturing index has dropped to 48.2%, indicating contraction in business conditions as it is below the 50% threshold [3] - The labor market is showing signs of softening, with the employment gauge falling to 44%, the lowest since August [3] Labor Market Impact - Companies are expressing concerns that tariffs on U.S. imports will increase operating costs, potentially leading to job cuts [2] - Executives from various industries, including petroleum and coal, anticipate significant changes in cash flow and employee headcount as they prepare for 2026 [4] - A large retailer reported a 20% year-over-year increase in average costs due to tariffs, complicating their cost distribution strategies [9] Tariff Effects - The OECD report indicates that while tariffs have not yet significantly impacted the global economy, their full effects may still be forthcoming [7] - The report highlights a sharp decrease in the value of U.S. imported goods subject to tariffs, suggesting that demand is being affected [8] - Tariffs and the uncertainty surrounding them are noted as ongoing challenges for manufacturers [9] Supply Chain Concerns - Respondents from various sectors, including electrical equipment and transportation, have indicated that current conditions are more challenging than during the COVID-19 pandemic, particularly regarding supply chain uncertainty [5][4]