Trump's immigration policy reduces labor, delays projects and raises costs, according to the Fed

"Economic uncertainty has halted the hiring plans of many U.S. businesses, but in the agriculture, construction and manufacturing sectors, companies are still looking for labor. And they are not being successful. The reason? The Trump administration's immigration policy. This is confirmed by the Beige Book, a compilation of anecdotal information about economic conditions in the 12 Federal Reserve districts that was published on Wednesday."

"The report release, which comes at a time of a data blackout due to the partial federal government shutdown, highlights situations such as that of a construction firm in Memphis, Tennessee, that is facing higher labor costs and project delays due to a reduction in available labor. Contacts in manufacturing, construction, and agriculture continue to report labor shortages due to workers not reporting to work because of fears of deportation."

"For example, a construction firm in Memphis reported that the reduced labor pool was driving up labor costs and resulting in project delays, explains the St. Louis Federal Reserve Bank. In Philadelphia, the Federal Reserve Bank reported that its sources were also noticing a slight disruption in labor markets due to anti-immigration policies: Contacts highlighted potential disruptions in the labor market from immigration policies."

Immigration enforcement and policy changes have reduced worker availability across hospitality, agriculture, construction, and manufacturing. Companies in agriculture, construction, and manufacturing continue to seek labor but report persistent vacancies and hiring failures. Workers are not reporting to work because of fears of deportation or altered visa status, producing staffing shortages and high demand for replacements. Reduced labor pools are driving up labor costs and causing project delays. Fed district contacts report disruptions in Memphis, Philadelphia, and Atlanta, and note that immigration-related raids and policy shifts have larger-than-expected impacts amid cooling labor markets and rising inflationary pressures.

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