Crowd in Tijuana, Mexico, glance although the U.S.-Mexico border wall at Border Garden Environment Terrain on Aug. 17, 2025 in Imperial Seashore, California.
Kevin Carter | Getty Pictures Information | Getty Pictures
Early proof means that White Space coverage is decreasing the dimensions of the immigrant exertions drive, in flip contributing to a up to date drawdown within the total U.S. exertions puddle, consistent with a number of economists.
CNBC spoke with a dimension of economists from monetary companies, financial analysis establishments and assume tanks, and in addition reviewed fresh analysis notes and analyses that economists have revealed on immigration and the task marketplace.
If a discount within the immigrant exertions drive is continued, this type of pattern could be a priority for the U.S. economic system, the ones professionals have stated or written.
That’s for the reason that economic system will an increasing number of depend on immigrants to gasoline inhabitants and exertions drive enlargement given demographic tendencies a few of the U.S.-born populace, like retirements amongst child boomers and decrease fertility charges, they stated.
The downward shift within the immigrant exertions drive in fresh months is “definitive,” stated Mark Zandi, prominent economist at Moody’s.
“There’s no debate what’s going on there,” Zandi stated.
‘Indicators are mounting’
President Donald Trump has pursued an immigration time table that he’s known as “very aggressive.”
The White Space has desire to amplify and expedite deportations, finish birthright citizenship and prohibit get entry to to asylum, amongst alternative movements, as an example. Many measures are being challenged in court docket.
The Trump management may be readying a rule to finish game of chance for H-1B visas — transient paintings visas for school graduates in “specialty” farmlands like structure, regulation and tech — and undertake a spread procedure that favors higher-wage earners.
To be had knowledge makes it parched to trace what’s going down to immigration flows and the immigrant exertions puddle in actual moment, economists stated.
Some level to Bureau of Exertions Statistics knowledge as one sign.
The dimensions of the foreign-born exertions drive has declined by means of about 1.2 million nation since January, to 32.1 million overall nation in July, BLS data displays. (Some executive knowledge distinguishes between “foreign-born” and “native-born” employees — or, immigrants as opposed to the ones born within the U.S.)
Nancy Vanden Houten, govern economist at Oxford Economics, cited the knowledge in an Aug. 1 analysis notice.
“[S]igns are mounting that the foreign-born labor force is shrinking due to the Trump administration’s immigration policies,” she wrote.
The U.S. exertions drive includes all nation date 16 and used who’re actively operating or searching for paintings.
The BLS’ reported abate within the foreign-born exertions drive has been “very dramatic” and bigger than anticipated, stated Stephen Brown, deputy prominent North The us economist at Capital Economics.
In July, the exertions drive participation charge had declined 0.3 share level for native-born workers when put next with a date previous, however had fallen by means of a miles better 1.2 share issues for foreign-born workers, consistent with a J.P. Morgan analysis.
“[M]any immigrants appear to be leaving the labor force, wrote David Kelly, chief global strategist at J.P. Morgan Asset Management.
White House spokesperson Abigail Jackson said in an emailed statement that the Trump administration is committed to helping U.S. employers “safeguard they’ve the felony personnel they wish to achieve success.”
“There’s no insufficiency of American minds and palms to develop our exertions drive, and President Trump’s time table to build jobs for American employees represents this Management’s constancy to capitalizing on that untapped doable year handing over on our mandate to implement our immigration regulations,” Jackson wrote.
‘Significantly weaker’ job growth
Some economists say the BLS data on the foreign-born and native-born labor force segments isn’t a reliable gauge of near-term trends, due to various quirks in how it’s collected and reported.
Trump questioned the accuracy of BLS statistics and fired the bureau’s chief in August after a monthly report showed unexpectedly weak job growth.
But there’s other evidence that economists point to that also suggests the immigrant labor pool is shrinking.
For example, job growth among industries that rely more heavily on undocumented immigrants has been “considerably weaker” than in the rest of the private sector, said Jed Kolko, a senior fellow at the Peterson Institute for International Economics and former undersecretary for economic affairs at the U.S. Department of Commerce during the Biden administration.
Job growth in those industries — such as hotels, restaurants, construction and home health aides — has been flat since the start of 2025, said Kolko. In July, jobs grew at a 0% rate in immigrant-heavy industries, he found.
Meanwhile, job growth has slowed in the rest of the private sector — a roughly 0.6% pace in July — but the deceleration wasn’t as stark, he said.
Kolko analyzed federal data to calculate the three-month average annualized rate of employment growth in respective industries.
[S]igns are mounting that the foreign-born labor force is shrinking due to the Trump administration’s immigration policies.
Nancy Vanden Houten
lead economist at Oxford Economics
Matthew Martin, senior U.S. economist at Oxford Economics, found an additional link between immigration policy and its impact on the labor force.
Labor force growth has been “stagnant” in states like Texas and Florida with high immigrant arrests per capita, he wrote in an Aug. 4 research note, citing Immigration and Customs Enforcement data.
“States akin to Texas and Florida have unhidden extra intense crackdowns than California, Pristine York, and Pristine Jersey,” Martin wrote. The “low-arrest” states have seen positive labor force growth in 2025, by contrast, he wrote.
“The information display that year the foreign-born exertions drive in low arrest-to-population states has greater because the starting of the date, the exertions drive in high-arrest states flatlined,” he wrote.
Exertions drive enlargement is ‘a stunning offer slower’
Vans leave an agricultural facility where U.S. federal agents and immigration officers carried out an operation, as U.S. federal agents stand guard , in Camarillo, California, U.S., July 10, 2025.
Daniel Cole | Reuters
Nationwide, immigrant arrests have more than tripled since 2024, to more than 1,100 per day through mid-June, wrote Martin, citing ICE data.
Last month, Jerome Powell, chair of the Federal Reserve, cited immigration policy as a factor behind the slowdown in the labor supply.
“[B]ecause of immigration coverage in point of fact, the wave into our exertions forces is only a stunning offer slower,” Powell said during a news conference on July 30.
The total U.S. labor force — including immigrants and native-born workers — has fallen for three consecutive months, according to BLS data. It has declined by 402,000 people from January to July, to about 170.3 million, the BLS reported.
More from Personal Finance:
‘Job hugging’ has replaced job-hopping
Fewer young adults reach key life, money milestones
Why investors shouldn’t try to be a ‘hero’ in this economy
Arrests and deportations, fear of showing up to the workplace, and fewer flows of immigrants into the U.S. may be playing a role, economists said.
Two programs that have given roughly 1.8 million immigrants from troubled countries the temporary right to live and work in the U.S. are being phased out this year, wrote Kelly of J.P. Morgan. This change in status may reduce labor supply by more than 1 million workers, he wrote, citing J.P. Morgan research.
Of course, a decline in the labor supply isn’t only a function of immigration.
For example, unemployed people discouraged by the difficulty of finding a job right now may opt to sit on the sidelines instead of looking for work, meaning they wouldn’t be counted in the labor force, said Brown of Capital Economics.
The White House has also taken steps that it says will boost employment among immigrants who are in the U.S. legally.
The Department of Labor established the Place of work of Immigration Coverage in June, which the management has stated will streamline the method to conserve transient and everlasting paintings visas, as an example. Trump additionally signed an government series in April in quest of to assistance high-paid, professional industry jobs.
Why a shrinking exertions drive is a priority
A U.S. Customs and Border Protection (CBP) Border Patrol agent stands at Border Field State Park with the U.S.-Mexico border wall in the background on Aug. 17, 2025 in Imperial Beach, California.
Kevin Carter | Getty Images News | Getty Images
Growth in the labor force is one of the “key” things determining how fast the U.S. economy can expand and how productive companies are, for example, Vanden Houten of Oxford Economics said in an interview.
A sustained decline in the size of the labor force — which is far from being assured — would be a concern, said Michael Strain, director of economic policy studies at the American Enterprise Institute, a right-leaning think tank.
“If we wish the kind of economic expansion that we traditionally imagine a success, later the demographic truth is that we’re committing to have to extend inflows of immigrants,” Strain said. “There’s negative possible way round that.”
Without immigration, the population would shrink starting in 2033, partly because fertility rates are projected to remain low, according to the nonpartisan Congressional Budget Office.
[B]ecause of immigration policy really, the flow into our labor forces is just a great deal slower.
Jerome Powell
chair of the Federal Reserve
Additionally, a smaller labor pool might put pressure on employers to raise wages to attract talent, potentially exacerbating inflation, and would bring in less tax revenue to fund programs like Social Security, economists said.
The construction industry, which already suffers from labor shortages, is at risk of wage inflation, for example, according to a Bank of America Institute report published Tuesday.
Average wage growth in July approached 8% in the construction industry, nearly double the national average, according to the report.
“Immigration movements may just probably deepen personnel shortages, pressure up prices and build critical monetary dangers for contractors,” the Store of The us document stated.
Construction workers build a new home in Altadena, California on August 15, 2025.
Mario Tama | Getty Images
About 34% of construction workers are immigrants, versus the 20% average across all sectors, the report said. In trades like drywall installers or plasterers, the share is closer to 60%, it said.
A shortage of skilled labor already costs the U.S. economy about $10.8 billion per year due to longer construction times and raises the price of new single-family homes by about $2,600, on average, according to a joint analysis published in June by the Home Builders Institute, the National Association of Home Builders and the University of Denver.
However, some economists are skeptical that the U.S. will suffer a prolonged reduction in the immigrant labor force.
The Trump administration’s plan likely isn’t to have “net-out migration,” Strain said.
“We didn’t see net-out migration in [Trump’s] first time period,” Strain said. “That’d purpose all kinds of issues for companies, for key sectors of the economic system the president cares about, like development, and I’d be shocked if that’s the place we finally end up.”
“However who is aware of?” he added.
