Axios reports:

President Trump’s immigration crackdown is causing one of the sharpest slowdowns in U.S. population growth in decades. Economists are beginning to tally the effects, with some warning that the damage will stick around.

Why it matters: The policy-driven immigration reversal underway has few modern parallels. The immediate result is evident in monthly employment figures, with the economy cranking out fewer jobs.

• But over time, fewer immigrants could be a productivity drag lasting well into the second half of this century.

The intrigue: Federal Reserve analysis earlier this year found that the breakeven rate — the monthly job gains needed to hold unemployment steady — had dropped close to zero as an immigration slowdown weighed on labor force growth.

• In other words, negative job numbers no longer reliably signaled a downturn.
• Now, a new paper examines state-level data for clues about whether that mix — slow population growth plus near-zero employment gains — leaves the labor market more vulnerable to shocks.
• The Congressional Budget Office projects potential labor-force growth to slow over the next decade, averaging less than half its 2025 pace as lower immigration weighs on workforce growth.

Zoom in: States with slower population growth saw more sluggish employment, with more frequent job losses, relative to states with faster population upswings, the paper — by a group of Fed board economists — found. [Continue reading…]