2 hours ago
1
- The U.S. population is poised to begin contracting in 2031, earlier than projected, according to the Congressional Budget Office, in large part due to President Donald Trump’s anti-immigration policies. The agency now projects 290,000 immigrants will be removed from the country between 2026 and 2029. Economists warned less immigration and negative net migration could create woes for the U.S. labor force and inflation.
President Donald Trump’s immigration crackdown is resulting in the U.S. population growth shrinking faster than anticipated, according to the Congressional Budget Office (CBO)—a phenomenon economists have warned will lead to a labor shortage, drive up inflation, and, under some circumstances, shrink U.S. GDP growth.
The nonpartisan budgetary agency published a revised demographic outlook on Wednesday, projecting death will exceed births in the U.S. beginning in 2031, two years earlier than it previously projected, as a result of a diminished immigrant population as well as lower fertility rates.
The CBO attributed the revisions in large part to Trump’s 2025 reconciliation act, or “One Big Beautiful Bill,” which provides a total of $170 billion for immigration and border enforcement, including a lump sum of $29.9 billion to U.S. Immigration and Customs Enforcement (ICE) operations and the hiring of 10,000 ICE officers.
About 290,000 immigrants will be removed from the country between 2026 and 2029 as a result of the law, the CBO said, and about 50,000 immigrants will be detained per day in the same period. An increase in ICE personnel will lead to 5,500 more arrests in 2026 and 100,000 more in 2029 than if the policy had not been enacted. Another 30,000 are projected to leave voluntarily between 2026 and 2030.
This crackdown will have a direct effect on labor, according to the agency.
“CBO estimates that the additional detentions resulting from the law will have two effects,” the report said. “First, people who are detained will not be available to work and will therefore not be in the labor force. Second, detention increases the likelihood that immigrants who receive an order of removal will be successfully removed.”
The White House did not immediately respond to Fortune’s request for comment.
The economics impact of an immigration crackdown
Trump’s anti-immigration efforts have led economists to sound the alarms about the policy’s impact on the U.S. workforce and subsequent economic health.
While the CBO still expects a positive net migration for 2025, economists have also warned that a negative net migration—which Trump has actively worked for as a result of his policies—could hinder U.S. GDP growth.
A working paper published in July from the American Enterprise Institute (AEI), a conservative economics policy center, found negative net migration could lead to a loss in consumer spending and a diminishing labor force that could shrink U.S. GDP growth by 0.3% and 0.4%, or roughly between $70.5 billion to $94 billion in annual lost economic output.
“Our workforce is disproportionately made up of immigrants relative to their share of the population, and because of that we…really can’t sustain a high level of job growth with the U.S.-born population alone, because there just aren’t enough bodies, essentially, to do that,” report co-author Tara Watson, a Brookings Institute economist and professor of economics at Williams College, previously told Fortune.
Moody’s chief economist Mark Zandi said last month the labor force shrinkage, as a result of a narrowing immigration population, could even have inflationary effects, predicting inflation could rise from 2.5% to around 4% early next year if deportations continue at their current rate.
The U.S. Department of Labor reported last month that the producer price index (PPI), which measures wholesale inflation, rose 0.9% from June to July, up 3.3% compared to the period a year ago. The core consumer price index increased 0.2% from June to July. Inflation continued to rise in August as new job numbers slumped.
“Foreign-born labor force is declining, and the overall labor force has gone flat since the beginning of the year,” Zandi told Fortune last month. “That’s causing tightening in a lot of markets, adding to costs and inflation.”
“You can see it in meat prices, agriculture, food processing, haircuts, dry cleaning,” he added. “The fingerprints of the restrictive immigration policy are all over the CPI and PPI numbers we got this week.”
This story was originally featured on Fortune.com
English (US) ·