JPMorgan’sJPM

head of research suggests that immigration is playing a crucial role in driving the US economy beyond post-pandemic expectations. A near-record 3.3M immigrants came to the US last year, and a similar number is expected this year. Goldman SachsGS

projects that this above-average influx could boost GDP by 0.3% this year.

• Immigration is compensating for declining birth rates, resulting in the largest single-year population increase in the US in 2023.
• The expanding labor force is helping to moderate wage growth and keep inflation down, which could keep the economy humming through 2024 and lead to prolonged higher interest rates.

What about illegal immigration? While undocumented crossings made up a portion of last year’s record immigration, Pew Research estimated in 2020 that only a quarter of immigrants were unauthorized. Despite the expectation of continued high immigration through 2026, a smaller proportion will originate from the US-Mexico border, as Congress recently passed the most aggressive immigration bill ever. However, in the first four months of 2024, the southwest land border apprehension rate surged to 92% — the highest in history.