How immigrants affect the US economy

Last year's surge in immigration helps explain the remarkable resilience of the U.S. economy. If immigration processes continue, this will continue to allow the labor market to flourish, reports Axios.

Photo: iStock.com/Delpixart

Immigration issues are the subject of fierce political debate, but rising immigration is a key part of the surge in labor supply in the labor market.

A new analysis from the Brookings Institution provides some hard numbers on the relationship between rising immigration and the labor market. The influx of labor is allowing the U.S. to maintain a higher rate of wage growth than forecasters predicted before the pandemic.

On the subject: 'My family will be a target': Russian immigrants fear Putin even in the US

“Faster population and labor force growth means that the labor market, without increasing inflationary pressures, can grow faster than previously thought,” economists Wendy Edelberg and Tara Watson write for the Hamilton Project.

Before the pandemic, experts believed that sustained monthly employment growth would be between 60 and 000 in 130.

But Edelberg and Watson say that given higher levels of immigration, the economy could support an increase of 160 to 000 jobs in 230 "without increasing labor market pressures that would lead to rising wages and price inflation."

The authors estimate that if immigration continues at current rates, "employment growth of nearly 200 workers per month would correspond to a healthy but not too hot labor market." That's about twice as much as forecasters had expected before immigration boosted the labor market.

Impact of immigration

Experts say the surge in immigration has not only shaken the labor market, but also contributed to robust consumer spending and GDP growth.

Immigration boosted real consumer spending by about 0,2 percentage point last year—a similar rise is expected this year.

Economic activity directly linked to increased immigration has also increased real GDP by 0,1 percentage point per year since 2022.

But experts say increased immigration has increased demand for housing - and may have put "severe pressure on rents in some areas." The effects of the immigration surge are still being felt.

You may be interested in: top New York news, stories of our immigrants and helpful tips about life in the Big Apple - read it all on ForumDaily New Y

On Capitol Hill last week, Fed Chairman Jerome Powell emphasized the importance of immigration to the growth of the US economy.

“It’s just arithmetic,” Powell told the House Financial Services Committee. “If you add a couple million people to the economy, some of whom are working, output will increase.”

“I'm just reporting the facts,” he noted. — I am not going to talk about politics indirectly or directly. Immigration and labor force participation contributed to very strong growth in economic output last year.”

Read also on ForumDaily:

More than 100 thousand rich Americans do not file returns and do not pay taxes: what awaits them

Nine types of people who shouldn't go to the USA

When can you see the fire falls in Yosemite: a calendar of the best days to visit the famous park

Do you want more important and interesting news about life in the USA and immigration to America? — support us donate! Also subscribe to our page Facebook. Select the “Priority in display” option and read us first. Also, don't forget to subscribe to our РєР ° РЅР ° Р »РІ Telegram  and Instagram- there is a lot of interesting things there. And join thousands of readers ForumDaily New York — there you will find a lot of interesting and positive information about life in the metropolis.