Immigration has been strong over the past two years, creating a flood of potential workers that will pay more in the job market and lead to surprises and quirks in closely watched economic data.
The Congressional Budget Office estimates Net immigration totaled about 3.3 million people This year, 2023 matches the number and exceeds the 900,000 that was normal before the pandemic.
As the jump has come Legal migration And Borderline fears The rise, and the jump of immigration, is political ControversialA pop in population spurs strong hiring.
As immigration adds to the labor supply, economists expect job growth to be strong without overheating the economy. A Brookings Institution analysis Recently Employers are estimated to be able to add 160,000 to 200,000 jobs per month this year without the risk of rising wages and inflation. Without all the immigration, it would have been 60,000 to 100,000.
But because immigration flows are uncertain, estimates of that “breakeven” employment level vary widely. Goldman Sachs puts it at 125,000, while economists at Morgan Stanley think it could be as high as 265,000.
Recent data may help explain a mystery of immigration: a large gap between the two primary employment measures.
Every month, the government releases employment statistics based on two surveys. The “Establishment Survey” collects data on businesses and government agencies and is used to measure overall job gains. The second measure, the Census of Households, is the basis for Census Bureau estimates, the unemployment rate, and most demographic information.
Although the household survey showed a decline, the company survey showed hiring increases in recent months. Such a large difference is unusual, and analysts are scrambling to figure out which poll gives the more reliable reading.
Immigration may be behind at least some of the cleavages. Companies typically report hiring all types of workers, including immigrants, in real time. This explains the strong job gains in the establishment survey. Census estimates, on the other hand, may pick up the recent surge in immigration only with a delay.
For the housing survey, “immigration data that feeds the estimate lags by a year and a half,” economists at Morgan Stanley wrote. “On the contrary, we think the wage survey may be right.”