Amidst the whirlwind of economic forecasts and political debates, a silent yet powerful force is propelling the U.S. economy forward: immigration. JPMorgan’s head of global research, Joyce Chang, has shone a spotlight on this often underappreciated aspect of economic growth, revealing that immigration has been a significant, albeit underestimated, boon to the U.S. economy.
The narrative of the U.S. economy in 2024 is one of optimism and resilience. After years of speculation about a potential recession, the economy is now on track for a healthier growth rate, signaling that a soft landing is indeed taking shape. This positive outlook is, in part, thanks to the contributions of immigrants, who have historically played a crucial role in the nation’s economic success.
Chang, speaking on CNBC, highlighted the fact that many economic forecasts failed to fully recognize the impact of immigration. She stated, ‘One thing that was really underestimated in the U.S. was the immigration story.’ This oversight is now being corrected as JPMorgan has revised its full-year forecast for U.S. GDP growth, increasing it by one full percentage point to 1.3% for 2024, a significant jump from the previously expected 0.3%.
The bank’s newfound optimism is echoed by the Federal Reserve, which also revised its GDP growth forecast from 1.4% to 2.1%. These adjustments come on the heels of a report from the Congressional Budget Office, which estimated that immigration would contribute an additional $7 trillion to the U.S. GDP over the next decade.
Immigration’s role in the job market cannot be overstated, especially during periods of low unemployment. With the U.S. unemployment rate recently creeping up to 3.9%, the influx of immigrants has been vital for businesses struggling to find workers to fill job vacancies. Chang pointed out that the U.S. population has grown by almost 6 million in the past two years, which has significantly boosted consumption and contributed to the low unemployment figures.
Moreover, the economic activity generated by immigrants—securing jobs, spending money, and building savings—acts as a lubricant for the U.S. economic engine. Consumer spending, a cornerstone of the U.S. economy, is thus amplified by the presence of immigrants who live, work, and spend within the country.
The importance of immigration in maintaining a strong workforce and supporting job growth has been further emphasized by JPMorgan Chase’s chief U.S. economist, Michael Feroli. He noted that immigration has been crucial to the ‘surprising pace of job growth,’ even as the unemployment rate has modestly increased.
While the political landscape remains divided on immigration, with former President Donald Trump vowing to reinstate restrictive policies and President Biden reversing these measures, the economic benefits are clear and quantifiable. Chang’s assertion that ‘the revenues that are generated exceed the expenses’ is a testament to the positive fiscal impact of immigration.As the U.S. economy navigates through inflation and other global challenges, the role of immigration as a catalyst for growth and stability is becoming increasingly evident. It’s a narrative that deserves greater attention and appreciation, as the nation continues to draw strength from its diverse and dynamic population.
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JPMorgan’s head of research says immigration is undeniably a ‘good thing’ for the economy, as the bank forecasts even higher US GDP growth this year (yahoo.com)
JPMorgan’s head of research says immigration is undeniably a ‘good thing’ for the economy, as the bank forecasts even higher US GDP growth this year
Immigration is boosting the U.S. economy and has been ‘really underestimated,’ says JPMorgan research head
