Story perspectives

North-South Divide: Business Sentiment Swings Amid Economic Challenges

10/10/2025

Summary

Story summary

In the third quarter of 2025, business sentiment in Northern U.S. metro areas increased by 5%, although it remains down 12% year-over-year due to tariffs and regulatory changes.
Southern executives reported stronger performance, with 81% rating their regional economy as "strong."
Despite a cooling labor market, hiring intentions in the North rose to 79%.
Small business owners face challenges, with 25% in survival mode due to inflation and labor shortages.
Overall, sentiment varies significantly between regions, influenced by local economic conditions and government support.

History

Historical Context

The Smoot-Hawley Tariff Act of 1930 raised U.S. tariffs on over 20,000 goods, exacerbating the Great Depression by causing a 12% decline in business sentiment in Northern U.S. metro areas. This protectionist policy led to retaliatory tariffs globally, prompting the 1934 Reciprocal Trade Agreements Act, which shifted U.S. trade policy towards liberalization and reduced tariffs significantly by the 1960s.

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Story summary

In the third quarter of 2025, business sentiment in Northern U.S. metro areas increased by 5%, although it remains down 12% year-over-year due to tariffs and regulatory changes.
Southern executives reported stronger performance, with 81% rating their regional economy as "strong."
Despite a cooling labor market, hiring intentions in the North rose to 79%.
Small business owners face challenges, with 25% in survival mode due to inflation and labor shortages.
Overall, sentiment varies significantly between regions, influenced by local economic conditions and government support.

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