At the top of President Trump’s agenda is the flow of foreign workers into the United States, which has accelerated since the end of the Covid-19 pandemic. Foreign-born workers in the United States account for almost a fifth of the total workforce.
In December, the US Census Bureau adjusted its methodology to more accurately estimate fluctuations in migration flows. These adjustments will affect the forthcoming Bureau of Labor Statistics Employment Situation report for January. According to the new methodology, almost 3 million people migrated to the United States between 2023 and 2024, which is significantly more than the Census Bureau’s previous estimates.
Our analysis
Net immigration accounted for 84% of population growth in 2024, fuelling the fastest annual increase since 2001. The influx eased labour market tightness, tempered wage inflation (and its pass-through to goods and services prices), and increased output to support GDP growth.
An immigration crackdown or mass deportation could deal a severe blow to the economy. The Peterson Institute estimates that removing all of the 8.3 million illegal workers could result in flatline growth under the entire second Trump administration, while the National Immigration Forum estimates that scaling up operations to cope with mass deportation would cost $150 billion. Even expelling a tenth of unauthorised immigrants could suppress 1.2% of GDP growth by 2028 while generating additional inflation costs of up to 0.6%.
Written on 24 January 2025. Opinions subject to change. This document has no pre-contractual or contractual value. It is provided for information purposes. The analyses and/or descriptions contained in this document should not be considered as advice or recommendations from Lazard Frères Gestion SAS. This document does not constitute a recommendation to buy or sell securities, nor does it encourage investment. This document is the intellectual property of Lazard Frères Gestion SAS - 352 213 599 RCS Paris 25, RUE DE COURCELLES - 75008 PARIS
