Wall Street is divided on whether the migration behind us is a slowdown

Some argue that the decline in employment often reflects a smaller supply of workers, partly due to the campaign of President Donald Trump’s migration. Others say the slowdown is significantly due to the increased demand for demand.

Discrimination is very important. If the difficulty in finding workers is the main factor, it is likely that weak employment trends will not be predicted, and the Federal Reserve can maintain high interest rates. But if the employment is often slowing due to the decline in demand for employment, this will ask the central bank to intervene.

Veronica Clark, economist in Citigroup Inc. “It is very likely that there will be some effects of immigration in data, but the details also indicate the weak demand has nothing to do with migration, which seems to be getting worse.”

The latest job report from the Labor Statistics Office, which was published on August 1, was shocked by financial markets with weak employment numbers for July and the sharp downward reviews to the previous two months. It was a surprise that Trump fired BLS head, Accusing the agencyWithout evidence, forging the numbers to make it look bad.

These amendments raised the pace of salary statements to only 35,000 on average over the past three months, and slowed since 2020. While the unemployment rate decreased to 4.2 % in July, which coincides with the highest level since 2021, but it is still very different from what it was last year.

Analysts spent an extraordinary time during the following week, and they continued to dissect the report. The Trump administration’s dramatic changes in the trade and immigration policy this year have made the task of reading the labor market more challenging, just as these transformations sparked continuous economic expansion shares.

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The main question depends on the effect of decreased immigration. Two days before the report was issued, the Federal Reserve Chairman, Jerome Powell, told the Federal Reserve Correspondents The deduction will deduct In employment in the coming months, as long as the unemployment rate does not rise.

Even the Federal Reserve Chairman suggested what is called a tie rate-the number of jobs that the American economy needs to add each month to maintain a stable unemployment rate-it can be low like scratch, given what is happening with immigration.

The Powell interpretation, and the jobs itself, sorted Wall Street into two main camps. Many major economists – including those in Morgan Stanleyand Barclays PLC and Bank of America Corp. – He pointed to the signs that the slowdown of employment was more about the low labor supply, expecting that the Federal Reserve will wait to start lowering prices until at least December.

Other economists – like those in Goldman Sachs Group Inc. , Citigroup inc. and UBS group AG – Interpretation of the rapid deterioration in employing more as a sign of poor demand for employment, which would push the federal reserve to start price discounts at the next policy meeting in September.

“We see a little contradiction between slow growth growth and low unemployment when the effects of immigration controls are taken into account.” However, due to the speed that the employment appears to slow, “it will not take much to change our views.”

Both sides have organized different data points to support their analysis. The problem is not something among a large number of statistics mentioned in the job report itself can categorically answer the question in one way or another.

Immigration policy

The report includes the collapse of foreign workers and born on a capacity of families, and the figures indicate that the workforce and the population born abroad have decreased by about one million over the past three months-the number of officials management has accelerated the seizure of immigration policy achievements.

“Since the President took office, he has established about 2.5 million jobs for Americans, while we have canceled about a million jobs for workers born abroad,” said Stephen Miran, Chairman of the Economic House of Economists at the White House.

“This is the result of our strong immigration policy, for the strong border policy and preserving safe America,” said Miran, who is Trump. It was nominated on Thursday to fill A temporary opening for the Board of Directors of the Federal Reserve.

But many analysts, including those in Bloomberg Economic, have removed a decrease in the workforce, noting that it is largely related to how to build data. Many economists refer to a simultaneous and unreasonable increase in the workforce born in the original generator and population numbers.

“It is not a sudden gave birth to many children at the age of 16 and strengthened the indigenous people,” said Jonathan Bingan, UBS, chief US economist at UBS.

Through the demographic collapse of the report based on the increasingly doubtful living families, analysts try to focus more on what the employment data says from a survey study of companies – which has witnessed the large declining reviews of May and June -.

The best way to do this is to reach a list of industries most dependent on a migratory workforce and try to estimate whether these things are clearly going. Various people extract from different conclusions of the same exercise.

Economists in Bank of America are the most prominent employment of construction, manufacturing, entertainment and hospitality, and the sectors where immigrants are not documented and those who lose their legal status more vulnerable to employment. Meanwhile, Goldman Sachs economists indicated that the most -based immigration industries do not really see a slower growth in jobs than, for example, those that are not proportional to definitions.

The workforce sharing rate has decreased 0.4 percentage points during the past three months, which represents the largest such decrease in eight years, with the exception of the beginning of the epidemic.

Those who see the migration is the perpetrator behind the slowdown of employment, citing a decrease in participation as an indication of the display. Clark from City said that the increasing conditions of demand could also be weighed on.

Clark said: “The two issues would involve a decrease in the employment offer this year – slowing immigration and poor demand, as the work of the workforce usually falls in decline.” “But if the weak demand is the most calm force, it will not be enough to prevent the unemployment rate from height.”