How immigrants are helping boost the U.S. job market without affecting inflation
Blockbuster jobs growth continues to power the U.S. economy, with the BLS reporting 303,000 payrolls added in March. Immigrants are a big part of that success.
Blockbuster job growth continues to power the U.S. economy, with the Bureau of Labor Statistics reporting 303,000 payrolls added in March.
Usually, such strong growth might signal that inflation could pick up. If employers see more demand for goods and services, they need to hire more workers — and if there aren’t enough workers, they have to increase pay, which increases the overall cost of running the business.
But while annual price growth, at more than 3%, remains above the Federal Reserve’s 2% target, it is still well below the 9% peak seen in the summer of 2022.
Economists increasingly believe that the post-pandemic surge in immigration is a key reason the economy has been able to grow steadily without pushing inflation higher, as the new arrivals have helped employers fill roles at levels of pay that have kept a lid on overall price growth.
In a note to clients published Friday, titled “Why we have both strong growth and lower inflation,” Goldman Sachs chief U.S. economist David Mericle said rising immigration had boosted labor force growth. As a result, the strong demand that consumers continue to exhibit elsewhere is unlikely to raise prices by much, “if at all,” he said.
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