Economic Forecast Slower Due To Lower Immigration, New Data Confirm

Population Growth and Economic Implications - The latest U.S. Census Bureau estimates indicate very low population growth from June 30, 2024, to July 1, 2025, suggesting potential future weaknesses in economic growth [2] - Natural population increase has been low, with fluctuations primarily driven by net migration, which is not perfectly measured [4] - Population growth in the coming years is expected to be lower than the recent gains, with net migration showing significant fluctuations during different presidential administrations [7] Labor Market and Productivity - Most immigrants are of working age but tend to be lower-skilled and earn lower wages, which means a drop in immigration has a less significant impact compared to a decline in native-born workers [5] - Low-skilled workers complement high-skilled workers, affecting overall productivity and earnings in various sectors [6] - Labor productivity growth is beginning to reflect advancements in artificial intelligence, with historical productivity gains showing variability [8] Economic Growth Forecast - With approximately zero population growth and an expected productivity growth of around two percent, inflation-adjusted GDP is projected to increase by slightly more than two percent in the near term [9] - Business planning should be slightly less optimistic than in previous years, particularly for sectors serving low-wage consumers, which will experience slower growth [10] - The economy can remain healthy with low immigration, but its size and characteristics will differ from scenarios with higher immigration levels [11]