Here’s What Might Be Driving America’s Strong Job Market
By: Anneken Tappe · March 15, 2024 · Reading Time: 2 minutes
The U.S. economy is doing pretty well at the moment, especially compared to its peers. President Joe Biden called it “the envy of the world” during his recent State of the Union speech. Job growth has been strong and steady – to the surprise of some economists. But new research is shining light on what the cause might be.
Economists at the Brookings Institution’s Hamilton Project point to a recent surge in immigration as a key driver of job growth.
Exceeding Expectations
In 2023, the U.S. economy added on average more than 250,000 jobs per month. That was well above expectations, especially in the face of high interest rates that drove up costs for companies.
Looking at it through a different lens, the U.S. job market was able to absorb far more new workers than economists predicted to be available. And immigration might just explain the disconnect.
The Congressional Budget Office (CBO) estimates that the number of net immigration into the U.S. was 3.3 million last year, far exceeding prior estimates from other groups, including the Census Bureau. In comparison, net immigration averaged just 900,000 people per year during the 2010-2019 period, according to CBO. For 2024, the agency again projects net immigration of 3.3 million again, before it steps down to 2.6 million in 2025.
Economic Impact
Economists have long agreed that immigration has a net positive economic impact as both output and productivity increases. And according to the Brookings economists, consumer spending and subsequent GDP growth was likely helped by the jump in immigration, too.
If this trend continues as the CBO expects, the U.S. economy could see this boost reflected in future data as well.
Looking for more stories like this? Check out On the Money — SoFi’s one-stop-shop for news, trends, and tips!
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
SOSS24031501