Description
Immigration into the United States has surged in recent years, and it has boosted economic growth. Based on an analysis of records from the Department of Homeland Security and other sources, the Congressional Budget Office (CBO) has substantially revised up its estimates of net immigration into the United States. CBO now estimates net annual immigration averaged 3 million in both 2022 and 2023 and projects that this year’s pace will be high as well.
Many new immigrants have likely joined the US labor force, increasing the productive capacity of the macroeconomy. The implied increase in “potential output growth” helps explain how the US economy could have grown at a robust 3.1 percent pace over the four quarters of 2023 without generating more inflation pressures.
Going forward, the rate of immigration into the United States will depend on many factors, including how US economic and social conditions compare to those in other countries as well as immigration law and enforcement policies. Thus, immigration patterns may well change as these factors evolve.
This PIIE Chart is adapted from Karen Dynan’s blog post “PIIE projects continued global economic growth in 2024 amid lingering inflation concerns” and her presentation at the Global Economic Prospects: Spring 2024 event.
