Trump immigration policy may be shrinking labor force, economists say

Early evidence shows that the White House policy reduces the size of the immigrant labor force, which in general, in general, contributes to a recent disadvantage in the US working pool.

CNBC spoke to a series of economists from financial companies, economic research institutions and thinkers, and also reviewed the latest research notes and analyzes published by economists about the migration and labor market.

If a decrease in the immigrant labor force is maintained, such a tendency would be a concern for the US economy, these experts said or wrote.

This is due to the fact that the economy is considered to be more and more reliable to immigrants against population and labor growth, given demographic tendencies between the US -born population, such as retirement between infant explosions and lower fertility rates.

Mark Zandi, Moody’s chief economist, said in recent months.

“There’s no discussion what’s going on there,” Zandi said.

Minister Donald Trump watched an agenda of immigration, which he calls “very aggressive”.

Trump Management Prepare a rule Temporary working visas for H-1B visas-Temporary working visas for university graduates “expertise“Architecture, law and technology -And adopt a selection process that supports higher paid earnings.

Economists said that the existing data makes it difficult to watch what happened in real time to the immigrant flow and immigrant labor pool.

Some point to the data of the Workers’ Office as a single signal.

Approximately 1.2 million people have fallen to 32.1 million people in July, BLS data Demonstrations. (Some government data are divided into “foreign-born” and “native-born” workers against those born in the United States)

Oxford Economics’ economist Nancy Vanden Houten showed the data in the August 1 research note.

“[S]IGNS says that the Trump administration has shrunk foreign -born labor due to migration policies. “

US labor force to be included All people who work actively or seek jobs.

Capital Economics’s North America Deputy Economist Stephen Brown said that the decline reported in BLS’s foreign -born labor force was “very dramatic” and greater than expected.

In July, the labor force participation rate Local -born workers Compared to a year ago, but a much larger 1 percent point dropped Foreign -born workersAccording to JP Morgan analysis.

“[M]JP Morgan Asset Management’s global strategist David Kelly seems to be leaving any immigrant labor force.

White House spokesman Abigail Jackson said in a statement sent by E -mail, Trump administration is sure that employers “have a legal labor force that they have to succeed”.

“There is no shortage of American minds and hands to enlarge our labor force, and President Trump’s agenda for American workers represents the commitment to benefit from this unused potential while fulfilling our authority to implement our laws of immigration.”

Some economists, BLS data about foreign -born and domestic -born labor segments Not a reliable indicator Close -term trends due to various strangenesses about how it was collected and reported.

Trump questioned the accuracy of BLS statistics and fired the office chief in August after a monthly report showed unexpected weakness growth.

However, there are other evidence that economists indicate that the immigrant labor pool has shrunk.

For example, Jed Kolko, the former economic undersecretary of the US International Economy Institute and the US Department of Commerce during the Biden administration, said that Jed Kolko was “significant weaker” during the rest of the private sector.

Kolko, hotels, restaurants, construction and home health assistants, such as the growth of these industries since the beginning of the beginning of 2025, he said. In July, things grew by 0% in immigrant heavy industries.

Meanwhile, business growth slowed down in the rest of the private sector – roughly 0.6% speed in July – but the slowdown was not sharper, he said.

Kalko analyzed federal data and calculated the annual average annual employment growth rate in the relevant industries.

Matthew Martin, a senior economist of Oxford Economics, found an additional connection between immigration policy and the impact on the labor force.

In states such as Texas and Florida, the growth of labor, with high migrant arrests per capita, was “stagnant”, and in the research note of 4 August, referring to migration and customs enforcement data.

“The states like Texas and Florida have seen more intense pressure than California, New York and New Jersey,” Martin said. Authorized, “low prisoner” states saw positive labor growth in 2025, on the contrary.

“The data shows that foreign -born labor force has increased since the beginning of the year, but the labor force in the high -prisoner states has been flattened,” the data wrote.

Throughout the country, immigrant arrests have doubled since 2024 and more than 1,100 per day until mid -June.

Last month, Federal Reserve President Jerome Powell showed the migration policy as a factor behind the slowdown in labor supply.

“[B]The migration policy is indeed, the flow to our labor force is much slower, “Powell in question At a press conference on July 30.

According to BLS data, total US labor-nomads and domestic-born workers fell for three months. BLS reported that 402,000 people have fallen to approximately 170.3 million from January to July.

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Economists, arrests and exiles, fear of coming to the workplace and less immigrant flow to the United States played a role.

Kelly from JP Morgan said that two programs that have roughly 1.8 million immigrants from problem countries have been gradually removed this year. By referring to JP Morgan Research, this change in status can reduce labor supply by more than 1 million workers.

Of course, a decline in labor supply is not only a function of immigration.

For example, unemployed people who give up the difficulty of finding a job at the moment may prefer to sit on the sidelines instead of looking for a job, so they will not be counted in the labor force, Brown Brown said the capital economy.

The White House also took steps that he said he would increase employment among immigrants in the United States.

Ministry of Labor established For example, in June, the administration will facilitate the process of securing the immigration policy office, for example, temporary and permanent working visas. In Trump signed An executive order that tries to support high -wage, talented trade business in April.

Without migration, the population would be shrinking because it was predicted that fertility rates would remain low from 2033. in accordance with To the non -Partizan Congress Budget Office.

In addition, a smaller working pool, employers, to attract skills, potentially increase inflation to increase wages to increase wages, such as prints such as social security will bring less tax revenue to finance programs, he said.

According to a Bank of America Institute, the construction industry, which is already suffering from labor shortage, is at risk of inflation. report Published on Tuesday.

According to the report, the average wage increase in July increased to 8% in the construction sector and almost double the national average.

“Migration actions can potentially deepen labor deficiencies, increase costs, and cause serious financial risks for contractor,” Bank of America report said. He said.

The report stated that approximately 34% of the construction workers were immigrants and a 20% average in all sectors. In trades such as plasterboard mounting or plaster, the share is closer to 60%.

The talented labor shortage costs the US economy about 10.8 billion dollars a year due to longer construction periods and according to a common partnership, the price of new single family houses increases the average of $ 2,600 analysis It was published in June by Home Builders Institute, National Home builders Association and Denver University.

However, some economists are skeptical that the US will be subjected to a long -term reduction in immigrant labor force.

Strip said that the Trump administration’s plan probably did not have “net-exit migration”.

“Net-out transport [Trump’s] The first term, “Strim said.

“But who knows?” Added.