Immigration is a significant contributor to the growth of the U.S. economy and its impact has been undervalued

Immigration is playing a significant role in boosting the U.S. economy amid global challenges, according to Joyce Chang, the chair of global research at JPMorgan. Despite high interest rates and inflation concerns, the U.S. Federal Reserve recently raised its GDP growth projection for 2024 to 2.1%, showing the economy’s resilience.

In a recent interview with CNBC, Chang pointed out that the increase in the U.S. population by almost 6 million in the past few years has contributed to higher consumption levels and low unemployment rates. She emphasized the positive impact of immigration on the economy, citing the revenue generated from immigrants exceeding the expenses.

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The U.S. economy’s outperformance compared to its peers can also be attributed to factors like high fiscal deficits, energy independence, and government spending. As the U.S. anticipates a federal budget deficit of $1.4 trillion in 2023, JPMorgan foresees a “shallow” loosening cycle from the Federal Reserve, with inflationary pressures persisting due to high government spending and immigration.

Chang highlighted the ongoing debates around immigration and border crossings, especially in the lead-up to the November presidential election. Despite these challenges, she remains optimistic about the economic benefits of immigration and consumption strength in the U.S.

It is evident that immigration is not just a political issue but also a crucial driver of economic growth in the United States. As the country navigates through various global and domestic challenges, the positive impact of immigration on the economy cannot be ignored.

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