President Donald Trump’s sweeping crackdown on immigration during his second term, marked by increased deportations and tough new visa bans, has led to an 80% drop in net immigration to the United States, new analysis from Goldman Sachs shows. The report, released on February 16, warns that a sharp contraction in the flow of foreign-born workers is fundamentally changing the nation’s labor supply math and lowering the threshold for job growth needed to maintain economic stability.
The investment bank’s U.S. economics team forecast a sharp decline in the arrival of new workers in a report led by David Mericle. Goldman Sachs said that while net migration averaged about 1 million people a year in the 2010s, that number would fall to 500,000 by 2025 and is expected to plummet further to 200,000 by 2026. That’s an 80% drop from a historical baseline, a shift the report attributes directly to aggressive policy changes, including “increased deportations,” the recent announcement of a moratorium on immigrant visa processing for 75 countries, and expanded travel bans.
Economists noted that these measures could significantly “slow the inflow of visa and green card recipients,” while the “loss of temporary protected status for immigrants from certain countries” would pose further downside risks to labor supply. The report explicitly links the projected decline to increased deportations and tightening of visa and green card policies.
Tight restrictions on the labor pipeline are forcing economists to rebase the U.S. economy. Since less immigration means fewer new workers entering the labor market, the economy needs fewer new jobs to keep the unemployment rate stable. Goldman Sachs estimates that the “break-even rate” for job growth will fall to just 50,000 jobs per month by the end of 2026, from the current level of 70,000 jobs per month.
“Labor supply growth has fallen sharply as immigration recedes from its peak in late 2023,” Mericle’s team writes. So monthly jobs reports that looked weak in previous years may now signal stability. “All that is needed to keep job growth at a break-even pace is a modest pick-up,” the analysts wrote, suggesting that the shrinking labor supply is masking what might otherwise be seen as weak hiring demand.
These missing workers have sparked considerable debate and even anxiety in the economy, as reduced immigration, the “shrinking ice” of Trump’s tariff regime and the debate over whether artificial intelligence is a boom or a bubble add to the noise in economic data.
