BOSTON (Reuters) - In his first address to the U.S. Congress, President Donald Trump hailed General Motors Co, Harley-Davidson Inc, Intel Corp and seven other companies as innovators and job creators, predicting they would be among those producing “tens of thousands of new American jobs” and investing “billions and billions of dollars.”
Nearly three years later, with unemployment at the lowest in half a century, that first presidential portfolio has stumbled to fulfill that forecast. While Trump’s 10 companies have spent billions on new factories and upgrades, they failed to keep pace with new hires, according to a Reuters analysis of the group’s capital expenditures and headcount since 2017.
Collective employment at Fiat Chrysler Automobiles NV, Ford Motor Co, GM, Harley, Intel, Lockheed Martin Corp, Sprint Corp, Walmart Inc and small biotech Amicus Therapeutics has remained flat at about 2 million workers, the analysis shows. In the same period, total U.S. employment has risen by 4.5%.
Wall Street has not smiled extensively on Trump’s selected companies either.
Most of the companies’ total shareholder return has trailed the S&P 500’s 47% advance and sector benchmarks since Trump’s February 2017 speech. Only four of the 10 have outperformed the broad benchmark while five have lagged the wider market by 35 points or more, as of Jan. 28.
White House Deputy Press Secretary Judd Deere declined to comment about the individual companies, but noted more Americans are coming off the sidelines and finding work, and U.S. wages and consumer confidence are rising.
“Despite headwinds from severe monetary tightening and a global recession, President Trump’s agenda of fair and reciprocal trade, lower taxes and deregulation has created the strongest economy we’ve ever seen,” he added.
Still, struggles within the Trump portfolio underscore how the president’s economic and immigration policies have produced uneven results as he seeks another term in the White House.
Since he took office, only Fiat Chrysler and defense contractor Lockheed Martin have added a meaningful number of net new workers.
Lockheed’s U.S. headcount is up about 15%. Fiat’s employment is up about 11%, with some gains coming from broader North American operations. The net gain of jobs at the two companies is about 22,800 since the end of 2016, according to company disclosures.
“What a great brand Jeep is,” Trump said in a shoutout to Fiat Chrysler’s hot-selling vehicle, before signing a tariff agreement with China.
By contrast, the combined overall U.S. headcount at Ford and GM has declined by about 10,000, or 5%, to 184,000, despite investing billions of dollars in their automotive plants. (For a graphic click tmsnrt.rs/315LHzh)
For a broader picture, the U.S. economy has produced an average of 193,000 new jobs per month, over the past three years. But even with the benefit of Trump’s 2017 massive corporate tax rate cut, that is 14% less than the 224,000 jobs per month created during the last three years of Barack Obama’s administration, according to U.S. Department of Labor figures.
“Trump wins some, loses some when compared to Obama,” said Mark Zandi, chief economist at financial research firm Moody’s Analytics, referring to various economic indicators like stock market gains (more under Trump), federal budget deficit (less under Obama), fixed mortgage rates (lower under Obama) and household net worth (higher growth rate under Trump).
But Zandi and four other economists interviewed for this story said Trump sets himself apart with a restrictive immigration policy that is exacerbating labor shortages across jobs that pay low wages and top-end salaries.
“This is going to become a very severe impediment to growth,” Zandi said. “We’re used to seeing 200,000 new jobs created every month, but it will be one-fourth of that a few years from now.”
The U.S. labor force has grown at an annual rate of 0.5% in the 10 years since the Great Recession ended. But in the other four recent recoveries, annualized labor force growth was more than doubled, exceeding 1%, according to economists at the Federal Reserve Bank of Dallas.
Meanwhile, a key plank in Trump’s agenda - rebuilding the country’s manufacturing base - recently took a hit when the sector fell into its deepest slump in more than a decade.
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