- ORIGINAL NEWS
Immigration is boosting the U.S. economy and has been ‘really underestimated,’ says JPMorgan research head
- SUMMARY
The U.S. economy is expected to grow at a solid pace in 2024, with the Federal Reserve projecting growth of 2.1%.
This is despite challenges such as high inflation and interest rates.
One factor contributing to the economic resilience is the recent surge in immigration.
According to experts, the influx of immigrants has boosted consumption and economic growth.
Despite the hot labor market and inflationary pressures, immigration has helped support the economy.
However, inflation remains a concern for the Fed, which has raised its projections for core personal consumption expenditure (PCE) to 2.6%.
This is higher than previous estimates and reflects continued upward pressure on services inflation and other factors such as rising wages and energy prices.
While the economy is performing well overall, economists believe that the Fed may need to maintain higher interest rates for an extended period to fully bring inflation under control.
Additional spending, particularly in an election year, and the ongoing immigration influx are expected to keep inflationary pressures elevated.
Experts emphasize that the positive impact of immigration on the economy outweighs the challenges it presents.
Studies have shown that immigrants contribute to higher government revenues than the services they utilize and boost consumption through increased spending.
Other factors contributing to the U.S. economic outperformance include its high fiscal deficit and energy independence.
Europe’s reliance on Russian energy has made it more vulnerable to supply disruptions and economic challenges.
In conclusion, the U.S. economy is projected to continue growing in 2024, despite inflationary pressures and interest rate hikes.
Immigration is playing a significant role in supporting economic growth, while factors like government spending and ongoing inflationary pressures will likely require the Fed to maintain a cautious monetary policy stance.
- NEWS SENTIMENT CHECK
- Overall sentiment:
positive
Positive
“The recent surge in immigration into the U.S. is helping to bolster the economy despite a raft of global challenges.”
“It now expects the core PCE to come in at 2.6%, up from 2.4%, after January and February inflation prints dampened hopes that price increases were fully under control.”
Negative
“But the labor market has remained relatively hot and January and February inflation prints dampened hopes that price increases were fully under control.”
“Meanwhile, the Congressional Budget Office projects that the U.S. federal budget deficit totaled $1.4 trillion in 2023, or 5.3% of GDP, which will swell to 6.1% of GDP in 2024 and 2025.”