World Immigration News

Immigration can’t explain declining employment growth

Release Date
2025-10-31
Media
Federal Reserve Bank of Minneapolis
Summary
U.S. employment growth slowed significantly in 2025 compared with 2024. From May to August 2025, monthly nonfarm job growth fell by about 156,000 jobs. Roughly half of this decline is estimated to be linked to a sharp drop in net migration, especially among unauthorized immigrants.

However, the slowdown is broader than immigration effects alone. Job growth has weakened across many states and industries, including those that do not rely heavily on unauthorized labor. This indicates that overall labor demand is softening.

Real wage growth has also slowed, particularly for low-wage workers. If reduced immigration were the main factor, low-wage workers might benefit from less competition, but the opposite has occurred. This supports the view that hiring demand is weakening.

At the same time, unemployment has not risen because more people are leaving the labor force altogether. Some discouraged job seekers are stopping their job searches.

Overall, the evidence shows that declining immigration contributes to lower job growth, but a broader weakening of labor demand is also playing a substantial role in the slowdown.
Tags
United States of America

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