Stan Veuger, Wendy Edelberg, and Tara Watson probe the economic impact of the Trump administration’s approach toward immigration.
The first year of the second Trump administration has seen dramatic changes in immigration policy, resulting in a sharp slowdown in net migration to the United States. We expect the pattern of restrictive policy and increased enforcement to continue or intensify through the coming year. Building on work released in late 2024 and mid-2025, we use available data combined with judgment to estimate a range of likely outcomes for net migration for the years 2025 and 2026. We conclude that net migration was likely close to zero or negative over calendar year 2025 for the first time in at least half a century. Specifically, we estimate that net migration was between –295,000 and -10,000 for the year. For 2026, we project net migration is likely to remain in negative territory. These figures come with the caveat that recent reductions in data transparency make the estimates more uncertain.
The downward population pressure stemming from negative net migration has important implications for the macroeconomy. In recent years, growth in the U.S.-born working-age population has been weak, and nearly all growth in the labor force has stemmed from immigration flows. The 2022–24 immigration surge was accompanied by robust job growth, with immigrants both supplying labor and generating demand for goods and services. Conversely, the recent slowdown in population growth has affected the level of employment growth consistent with an unchanged unemployment rate, often called “breakeven employment growth.” We estimate that, in the second half of 2025, breakeven employment growth of 20,000 to 50,000 jobs each month was consistent with immigration flows. That number could dip into negative territory over 2026. Reduced immigration also has modest dampening effects on GDP and will weaken consumer spending by an estimated $60–$110 billion combined over the two years.
