Quick shot: Immigration: A central focus of early executive orders

The Donald Trump administration's first week in office was marked by decisive action, with a series of executive orders signed on various topics, including oil exploration, climate change and notably, immigration. Among the executive orders related to immigration, the administration declared a national emergency at the southern border, implemented stricter security measures for visa applicants through enhanced screening and directed officials to explore expedited removal procedures for recent entrants to the country. As these policies take effect, they raise important questions about their potential impact on the labor market and the U.S. economy going forward.

According to research by the Congressional Budget Office, the United States experienced a significant surge of about 3 million immigrants between 2023 and 2024, marking the largest increase in over a century. Looking ahead, we expect net immigration to stabilize at levels seen in the latter half of President Trump's first term of approximately 500,000 annually.  Our base case remains a strong but balanced labor market, although there is potential for tighter labor supply if the administration aggressively pursues deportations.

Notably, while estimates vary, undocumented workers constitute roughly 7% of the workforce, equating to about 9 million individuals. These workers are often overrepresented in specific industries such as agriculture and construction and in states like California, Texas and Nevada. We will be closely monitoring any signs of labor supply disruptions through reports such as those from regional Federal Reserve officials to assess any impact on the labor market and economy.

All market and economic data as of 01/28/25 are sourced from Bloomberg Finance L.P. and FactSet unless otherwise stated.

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