Economists have been keeping a close eye on the U.S. labor market as the economy continues to toe the line between inflationary and recessionary pressures. In particular, experts have noticed a divergence between sustained tightness in the labor market (e.g., low unemployment, high job openings), and easing inflation.
New research from Brookings points to elevated immigration as playing an important role in solving the challenge of tight labor markets without further increasing inflation. In 2023, net migration into the United States reached an estimated 3.3 million—significantly higher than immigration levels before the COVID-19 pandemic. This influx of people has bolstered U.S. population growth, added workers to the economy, and contributed to consistently strong consumer spending since 2022.
Maintaining a healthy level of immigration will be important for addressing the United States’ population growth and labor market challenge—a problem that many other countries around the world are also navigating. As growth in the native-born labor force stalls due to an aging population and low birth rates, immigration—especially high-skilled immigration—will help meet the rapidly growing demand for talent. This is particularly salient for critical industries that are experiencing major talent shortages, from cybersecurity to manufacturing.
