President Trump marks his first year in office Saturday riding a wave of strong economic news, including a record-high stock market, a low unemployment rate and computer giant Apple’s decision to bring back hundreds of billions of dollars from overseas and create 20,000 U.S. jobs, spurred by Republican tax cuts.
For the past year, Mr. Trump has been telling voters that his recipe of less regulation and lower taxes would be “rocket fuel” for employers.
One year since Mr. Trump’s inauguration, it looks very much like the economy is lifting off.
Corporate profits soared last year. Unemployment fell to a 17-year low of 4.1 percent, with employers adding about 2 million jobs.
Gross domestic product rose to more than 3 percent in the past two quarters. Consumer confidence and business optimism climbed, and holiday sales rose 5.5 percent over the previous year.
Factory output grew at an annual rate of 7 percent in the fourth quarter of 2016, its strongest performance since 2010, and the Federal Reserve’s data indicated more growth to come for manufacturers.
“At the center of America’s resurgence are the massive tax cuts that I just signed into law,” Mr. Trump told cheering blue-collar workers Thursday at a plant near Pittsburgh. “You’re already seeing what’s happening. There’s never been a better time to hire in America, to invest in America and to believe in the American Dream than right now.”
There were so many positive economic developments in the past week that it was hard to choose just one. But Apple’s stunning announcement of plans for expansion and hiring capped a string of decisions by nearly 190 employers to raise wages or hand out employee bonuses for 2.2 million workers, invest in new facilities or donate more to charities as a result of the corporate tax cuts approved last month.
The world’s most valuable public company announced that it will inject $350 billion into the U.S. economy over the next five years by repatriating most of the $252 billion in cash it holds abroad, a move prompted by the law’s one-time lower tax rate of 15.5 percent, down from 35 percent. The company expects to pay about $38 billion to the U.S. Treasury.
The iPhone maker also said it will build a new campus in the U.S. and increase its 84,000-employee workforce by nearly 25 percent. Apple plans to spend more than $30 billion on equipment to make its products, and it is giving each employee a $2,500 bonus of restricted stock units.
Apple CEO Tim Cook said large parts of these moves are a result of the tax cuts. The president said he called Mr. Cook Wednesday to thank him.
“I don’t imagine there’s ever been an investment that big in this country. They’re really going to town,” the president said. “The good news keeps pouring in.”
But amid the good economic news, the partisan dysfunction in Washington is as bad as ever. The president, who was locked in a spending and immigration dispute with congressional Democrats that threatened a partial government shutdown beginning Friday night, said Democrats “would like to blunt” the positive news resulting from the tax cuts by diverting the public’s attention.
Not a single Democrat in Congress voted for the tax overhaul.
“I really believe the Democrats want a shutdown to get off the subject of the tax cuts,” Mr. Trump told reporters. “That is not a good subject for them.”
Touring an equipment supply company near Pittsburgh that had its best year in 2017, Mr. Trump said, “This is real America. I’m really happy. People are doing really well, better than they have in years.”
He told cheering blue-collar workers, “You make America tick.”
In Washington, House Minority Leader Nancy Pelosi, California Democrat, was asked by reporters to give a report card on Mr. Trump’s first year in office. She quipped, “Why don’t we save that until we see if we can keep government open? That might impact the grade.”
Across the board, the economy picked up steam during Mr. Trump’s first year. On Wall Street, the Dow Jones industrial average rose to a record 26,000 on Wednesday, just one week after it hit a record of 25,000. The market was down slightly Thursday.
On Jan. 20, 2017, the Dow stood at 19,827, meaning it has increased about 31 percent since Mr. Trump’s inauguration.
Donald Boudreaux, co-director of the Mercatus Center’s Program on the American Economy and Globalization at George Mason University, said there are several reasons for the surging stock market, including Mr. Trump’s attack on regulations, the approval of tax cuts and Hillary Clinton’s loss in the 2016 presidential election.
“The market had expected a Clinton presidency, which would have been horrible for the economy in a lot of ways: [more] regulation and no prospect of tax relief,” Mr. Boudreaux said in an interview. “On the regulatory front, Trump has done very well. Stymieing regulation is so important, and he has done that.”
While the tax cuts and reform didn’t go as far as many conservatives had hoped, he said, “it’s certainly better than what we would have gotten under Hillary Clinton or a third term of President Obama under [liberal Sen. Bernard] Sanders or [Elizabeth] Warren. It’s an improvement.”
“Some portion of the stock market [surge] does reflect continuing relief that we’re not going to get Hillary,” Mr. Boudreaux said. “And part of it surely is due to the greater market-orientation of the regulatory agencies now.”
Bigger paychecks on the way
Corporate profits soared last year, even as employers added about 2 million jobs.
Sen. John Barrasso, Wyoming Republican, noted that the positive economic news is coming even before the tax cuts begin to show up for many workers in the form of bigger paychecks next month.
“Confidence and optimism — that’s what I’m seeing all around Wyoming, and it’s what I’m seeing across America, as we have 2 million new jobs in the year 2017,” Mr. Barrasso said. “A lot has to do with eliminating the punishing regulations of a previous administration, but also the tax relief legislation.”
Polling this week by Zogby Analytics found that Mr. Trump’s job approval rating has improved to 46 percent (up from 37 percent in early November) “because the current economic conditions in the U.S. are getting better.”
“Not everything is pointing to an economic boom, but there’s increased optimism among businesses due to the recent tax cuts passed by Republicans and the stock market is at an all-time high,” the polling firm said. “These factors and others might explain an increase in the president’s job approval rating right now with voters.”
In the latest survey, 54 percent of voters said they feel “excellent” or “good” about the economy for the next four years.
A New York Times/Survey Monkey poll this week found that 46 percent of Americans approved of the tax cut law in early January, up from 37 percent when the bill was nearing passage in December. Tea Party Patriots Citizens Fund Chairman Jenny Beth Martin said Americans “are already feeling the impact of tax reform, even though it hasn’t even fully kicked in yet.”
“The president’s determination to deliver on his conservative campaign promises to reduce regulations and cut taxes is resulting in a growing economy and a much more confident American public,” she said. “After decades of Washington dysfunction and out-of-control growth of government, the American people want results that will make their lives better. As this poll suggests, if they continue to see these results they will express their approval for the people they elected.”
At the factory near Pittsburgh on Thursday afternoon, Mr. Trump asked workers how their 401(k) retirement accounts were performing, and to applause, he joked, “You’re brilliant investors.”
“If we can keep it like this, we’re going to win a lot of elections,” Mr. Trump said. “‘It’s the economy, stupid’ — did you ever hear that one? It is, indeed.”
The president told employees at H&K Equipment Inc. that he is winning the battle over “power brokers” who don’t represent working Americans.
“America doesn’t belong to the Washington power brokers; it belongs to you,” Mr. Trump said. “I think we’ve taught them that. It doesn’t mean it’s easy. It’s nasty in Washington. But step by step by step, just keep going, right? But we’re getting it. Nobody thought we were going to have this kind of success so quickly.”