Immigration in US – Higher pace of employment growth without adding pressure to wages and price inflation

In this analysis, we consider recent immigration flows and their potential macroeconomic implications. Interpreting the current labor market requires understanding recent immigration: how many people arrived and how they engaged in the economy. Recent estimates from the Congressional Budget Office (CBO) suggest much higher rates of recent immigration than were previously projected. In 2019, CBO projected that net immigration in 2023 would total 1.0 million people; Now, the agency estimates that net immigration last year was 3.3 million. Moreover, we estimate that CBO’s current immigration estimates suggest faster population and labor force growth in recent years than currently reported by the Bureau of Labor Statistics (BLS) using Census population estimates.

Key takeaways:

• This analysis considers the macroeconomic implications of recent estimates of immigration flows.
• Recent immigration flows are notably higher than previous projections. New numbers from the Congressional Budget Office suggest that 3.3 million net immigrants arrived in 2023 compared to the 1.0 million projected prior to the pandemic.
• Higher immigration rates mean that employment growth does not need to slow significantly to get the labor market to a sustainable pace: The authors estimate that the labor market in 2023 could accommodate employment growth of 160,000 to 230,000—versus previous projections of 60,000 to 130,000—without adding pressure to wages and price inflation.
• The uptick can also help to explain the surprising strength in consumer spending and overall economic growth since 2022.

Chosen excerpts by Job Market Monitor. Read the whole story @  New immigration estimates help make sense of the pace of employment | Brookings