Labor researchers say trouble is brewing in Pa.’s economy as tariffs, cuts take effect

Pa.’s economy is strong — but there are signs trouble could be ahead.

Economic output and job growth have slowed, while indicators of inflation are starting to rise in the first half of 2025. And the most likely explanation of this shift are a rise in tariffs, a decrease in the size of federal investments and increasing uncertainty among business and consumers, according to a new report by the Keystone Research Center.

The biggest hits to the economy are yet to come, including the cuts to food assistance and Medicaid spending, according to the center’s economists.

“We’re just at the very beginning of the impacts,” said Stephen Herzenberg, an economist with the research center.

The center produces an annual report looking at the state of the economy’s impact on workers. Last year’s repo