A Federal Reserve analysis found that the breakeven rate for monthly job gains needed to keep unemployment steady fell close to zero as immigration slowed labor force growth. Negative job numbers therefore no longer reliably indicated an economic downturn. New research using state-level data examines whether slow population growth combined with near-zero employment gains makes labor markets more vulnerable to shocks. States with slower population growth experienced more sluggish employment and more frequent job losses than states with faster population growth. The findings suggest such patterns may occur even when unemployment remains stable, but low population growth alone does not necessarily increase susceptibility to shocks. The research also notes that immigration-driven population changes may evolve faster than past episodes in other advanced economies.
"They add that the current shift in population growth has been triggered by immigration shifts, "which have limited parallels in other advanced economies and may evolve more rapidly than in past episodes experienced by other countries." What to watch: New research from Yale Budget Lab shows that the productivity costs of slower flows of authorized and unauthorized immigration could outlast any single administration's policies."
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