As the chaos on the streets of California continues, US analysts are worried: the reduction of immigrant labor may impact the US economy

According to the Global Times, protests against the US government's crackdown on illegal immigrants broke out in Los Angeles, California, last Friday. As the chaos on the streets of California continues, some US analysts have paid attention to the close connection between immigration issues and the country's economy, and expressed concerns that the current reduction in immigration may impact the US economy.

Last year, the Congressional Budget Office of the United States predicted that in 2033, the number of foreign-born workers in the United States will increase by 5.2 million compared with 2023. In the past 10 years, the GDP created by foreign-born workers in the United States will reach 8.9 trillion US dollars.

From the current labor structure of the United States, in certain specific industries, the proportion of immigrants among employees is particularly high. For example, 25.3% of agricultural workers in the United States are immigrants; more than 40% of construction workers in California and Texas are immigrants. Under the current situation, US farms are already facing a shortage of 1.5 million to 2 million workers. The construction industry is also expected to face a shortage of 500,000 workers next year. The United States has recently experienced an "overheated labor market" situation where many jobs cannot be filled and wages continue to rise.

A report released by the Federal Reserve Kansas City Reserve Bank in late May said that the influx of immigrants into the United States in the past two years has played an important role in stabilizing the U.S. labor market and curbing inflationary pressures caused by rising wages. The report said that without immigrant labor, the U.S. economy cannot achieve a soft landing.

Deutsche Bank recently released a report saying that the number of immigrants to the United States this year has dropped by more than 90% compared with previous years, equivalent to a reduction of more than 2 million employed people in the labor market, which has brought negative supply-side shocks to the U.S. economy that even exceed tariffs. Deutsche Bank warned that the sharp drop in the number of immigrants may also have an impact on the U.S. financial market, including the possibility of causing the U.S. dollar index to continue to fall.

Deutsche Bank explained that last year, the United States had a high employment rate and a high willingness of employed people to accept low wages, which benefited the U.S. economy as a whole. The reason for this favorable situation is precisely because of the influx of a large number of immigrants into the United States. If the current US government continues to suppress immigration, the shortage of labor supply will lead to rising wages and prices, which will in turn affect the stability of the US economy.

Fortune magazine reported that changes in the job market may affect the Fed's decision to cut interest rates. Previously, Trump had been dissatisfied with the Fed's reluctance to cut interest rates, and also urged the Fed to cut interest rates because of the recent slow growth of US jobs. However, the fact is that due to the tightening of immigration policies, the number of potential jobs has decreased, and it is no longer necessary to have too many jobs to meet the needs of the labor market. This gives the Fed a reason to continue to "wait and see".

Public data shows that the United States has added an average of 124,000 jobs per month this year, and this number will be 250,000 in 2024. Since last summer, the US unemployment rate has remained at around 4.2%, without much change. Wall Street believes that the number of new jobs needed to keep the US unemployment rate basically stable will continue to decline, and may fall to 90,000 by the end of this year.