Welcome back. The White House has been busy trumpeting the first 12 months of its “America First” agenda.
US President Donald Trump outlined “365 wins in 365 days” on Tuesday to mark the first anniversary of his second inauguration, and echoed these apparent first-year successes in a speech at Davos.
Commerce secretary Howard Lutnick also wrote an op-ed in the FT. He argued that the old, globalist system “left working people . . . behind”, that the Trump administration’s new approach is “rebuilding domestic manufacturing” and “restoring the idea that . . . economic policy should serve American citizens”.
So how has the US president’s second attempt to “make America great again” fared? In this edition, I investigate.
Taking Lutnick’s emphasis, I’ll focus on how working people, manufacturing and, in general, American citizens, have got on in the past year.
Since January 2025, there are 584,000 more jobs in the US. Last year, median weekly real earnings continued to rise to all-time highs, excluding the pandemic.
But these aggregates are misleading. For one, more than 700,000 jobs were created in health services and private education. Blue-collar work, which the White House most associates with “working people”, has fared badly.
There are 68,000 fewer manufacturing jobs now than before Trump’s second term began. Total employment in manual sectors including manufacturing, construction, transportation, logging and utilities has shrunk.
The administration’s crackdown on illegal immigration has not led to clear wins for US-born individuals either, as Trump suggested.
“Over the past 12 months, the unemployment rate rose for native-born workers and fell slightly for foreign-born workers,” says Jed Kolko, senior fellow at the Peterson Institute for International Economics.
“Foreign-born and native-born workers aren’t simply competing for a fixed number of jobs. When firms can’t get the workers they need, sometimes they cut back production and let other workers go.”
America’s lowest-paid workers are also suffering a sharper slowdown in wage growth than their richer peers.
A rise in the rate of annual inflation following the implementation of tariffs has squeezed the lowest earners further. Data from Harvard Business School’s Pricing Lab shows that the cost of the cheapest US imports have jumped more than premium items over the past year.
Cost of living concerns, which helped Trump beat the Democrats in the 2024 US election, appear to have only intensified under his administration.
A greater proportion of households, across all income cohorts, reports higher prices as a problem today than before the president’s second term began, according to the University of Michigan’s Survey of Consumers.
Household spending has still been resilient, but it is built on shaky foundations. The savings rate as a portion of disposable income tumbled last year to its lowest since 2008, excluding the pandemic years. Total credit card debt also hit $1.2tn, a record high, in the third quarter. The share of balances in serious delinquency rose to its highest in 14 years.
Beyond the White House’s victory lap then, the people most closely tied to Trump’s “America First” message — blue-collar workers and the lowest earners — have had a tough year.
There is also no evidence of a renaissance in US manufacturing, notes Scott Lincicome, vice-president at the Cato Institute.
“Overall activity in the industry has contracted over the past 10 months, based on the ISM manufacturing PMI index,” he says. “Inventories are still historically elevated and capacity utilisation is weak too.”
Although Trump claimed US factory construction was “up by 41 per cent” in his Davos speech, the annual rate of new private manufacturing building dropped in 2025, after peaking the year before, according to official data.
As for jobs, manufacturers shrunk their payroll every month last year since May.
The decline is tied to tariffs, which have raised input costs. “Lutnick’s comments are detached from reality. Efforts to isolate US producers from the rest of the world with tariffs hurt the sector,” adds Lincicome. “The US manufacturing industry is still very much global.”
The National Association of Manufacturers estimated last year that 91 per cent of US manufacturers use imports to make things.
I outlined why the administration’s nostalgia for manufacturing would make the nation poorer in the April 13 edition of this newsletter.
In terms of ensuring policy serves Americans, it appears the White House’s agenda has, so far, served some citizens better than others.
Tariffs are a regressive tax. The Congressional Budget Office also estimates that households in the lowest income deciles would make net losses from the tax, credit and transfers decisions in the One Big Beautiful Bill Act over the coming decade. The highest cohorts are forecast to gain the most.
Then there is the AI investment boom, which the administration has egged on through tariff carve-outs, deregulation and various deals. It helped push the S&P 500 to an all-time high last year, while AI-related investments contributed around 39 per cent of total US GDP growth in the first nine months of 2025, based on research by the St Louis Federal Reserve.
Tech activity has supported all Americans’ stock holdings. But it has disproportionately benefited firms in the sector, particularly Silicon Valley and Wall Street financiers, and the already asset-rich. Indeed, household confidence and the S&P 500 moved in opposite directions last year.
Research from Bridgewater, an asset management firm, suggests a significant portion of chipmakers’ profits is unlikely to be recycled back into the economy.
“The labour required to build or operate data centres is quite small relative to the dollars of capex spend,” it finds. “In fact, AI capex is at risk of creating negative pressures for the labour market, as the tremendous amount of financing required drives up the cost of capital, creating headwinds for other, more interest-rate-sensitive sectors”.
The upshot is that labour’s share of US GDP dropped notably to its lowest on record in the third quarter. For an administration built on reshoring and worker-focused rhetoric, that’s an awkward statistic.
Perhaps it’s too early to judge the White House’s project. The president has also belatedly acknowledged concerns about affordability.
But Matt Gertken, chief strategist at BCA Research, notes that Trump’s approval on the economy — the biggest issue for voters — is dropping and may be hard to reverse.
“The K-shaped economy isn’t a winning strategy and the president’s attempts to ease monetary and fiscal policy face judicial challenges and a nearly gridlocked Congress. The administration has limited tools other than tariff relief to push up those at the bottom,” he says.
The US Supreme Court could soon rule that the bulk of last year’s tariffs were illegal and force duties to be repaid, which may provide a boost.
Still, the story of the first 365 days is largely one of the US economy showing its resilience despite the “America First” agenda, not because of it. Indeed, if the second Trump administration’s first 12 months is supposed to be a reflection of its new economic model, then it isn’t a very good advert.
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Free Lunch on Sunday is edited by Harvey Nriapia