Goldman Sachs predicts a surge in immigration will fuel economic expansion in the United States, prompting the bank to revise its GDP forecast for 2024.
Boosting Labor Force Growth
In a note released on Sunday, Goldman Sachs stated that heightened immigration levels will lead to an increase in the labor force, consequently boosting potential GDP growth in the country.
Immigrant Influx
Recent studies cited by the bank indicate that immigration exceeded the typical trend, with 1.5 million immigrants arriving in 2023, compared to the usual one million. Economist Ronnie Walker from Goldman Sachs anticipates this trend to persist in 2024, projecting immigration to be approximately one million higher than average.
Economic Impact
The influx of immigrants is expected to result in higher job creation, with Goldman Sachs revising its average monthly job gains estimate for 2024 from 150,000 to 175,000. As employment rates rise, consumer spending is also forecasted to increase, further propelling economic growth.
Revised GDP Projections
Goldman Sachs raised its real GDP growth forecast for 2024 to 2.4% on a fourth-quarter over fourth-quarter basis and to 2.7% for the full year. According to Walker, the increased immigration levels are anticipated to contribute 0.3 percentage points to potential GDP growth in 2024.
Overall Economic Outlook
The optimistic outlook on the US economy, influenced by immigration trends, aligns with a Congressional Budget Office (CBO) report released in February. The CBO projected an additional $7 trillion growth in the US economy over the next decade, attributed to elevated immigration levels.
Jade Simon
