Joyce Chang, the chair of global research at JPMorgan, emphasizes the significant but often overlooked contribution of immigration to the thriving U.S. economy amid global challenges.
The U.S. Federal Reserve recently revised its GDP growth projection for 2024 to 2.1%, reflecting the economy’s resilience in the face of prevailing high interest rates and inflationary pressures. Despite these headwinds, the labor market remains robust, with unemployment staying below 4% in February and job additions reaching 275,000.
Chang points out that the recent surge in immigration, which has increased the U.S. population by nearly 6 million over the past two years, has played a pivotal role in driving consumption and bolstering economic activity. This influx has been a significant factor in maintaining low unemployment levels and fueling consumption growth.
While acknowledging the upward pressure on wages, housing costs, and energy prices, Chang contends that immigration remains a positive force for the economy, generating revenues that exceed associated expenses. However, she acknowledges the contentious nature of immigration as a political issue, particularly in the run-up to the November presidential election.
In addition to immigration, Chang highlights other factors contributing to the U.S. economy’s outperformance, including its high fiscal deficit and energy independence. Despite facing challenges, such as high government spending and persistent inflationary pressures, Chang anticipates only a “shallow” loosening cycle from the Federal Reserve, emphasizing the continued significance of immigration in sustaining economic growth.
As debates surrounding immigration intensify, JPMorgan remains steadfast in its assessment of its positive impact on the U.S. economy, advocating for informed policies that leverage its potential for long-term prosperity.
