Despite concerns about high inflation and rising interest rates, the US immigration influx has been credited with helping to prevent a recession. JPMorgan Asset Management analyst Kelly explained that while the immigration surge may be chaotic and widely viewed as a major problem, it has actually had a positive impact on the economy.
The increase in the US population due to immigration has added strength to the economic outlook. Official government data on US population growth lags behind, but estimates show that over 545,000 people gained lawful permanent resident status in the first half of 2023. Additionally, there were nearly 250,000 encounters with undocumented migrants in December alone, a record high. Many of these new immigrants have found work in lower-wage industries like hospitality, retail, and various service jobs, contributing to job growth.
The influx of inexpensive foreign-born workers has helped to limit wage growth and inflation, which in turn has supported economic growth. JPMorgan Asset Management’s strategy chief emphasized that while the current immigration system is chaotic, it has widened the runway for a soft landing and made it easier to avoid a recession. The presence of cheap workers filling low-wage jobs has had a positive impact on the economy according to Kelly.
Overall, the increase in immigration has been a key factor in sustaining job growth and economic stability despite initial concerns about its impact on high inflation and rising interest rates. Kelly’s analysis points to
