Immigration and Economic Growth in the USA

New Congressional Budget Office annual report on the economy and the budget:

In calendar year 2023, the U.S. economy grew faster than it did in 2022, even as inflation slowed. Economic growth is projected to slow in 2024 amid increased unemployment and lower inflation. CBO expects the Federal Reserve to respond by reducing interest rates, starting in the middle of the year. In CBO’s projections, economic growth rebounds in 2025 and then moderates in later years. A surge in immigration that began in 2022 continues through 2026, expanding the labor force and increasing economic output. . . .

In CBO’s current projections, the number of people who are working or actively seeking employment continues to expand at a moderate pace through 2026. Higher population growth in those years, mainly from increased immigration, more than offsets a decline in labor force participation due to slowing demand for workers and the rising average age of the population. A large proportion of recent and projected immigrants are expected to be 25 to 54 years old—adults in their prime working years. . . .

CBO also projects that high rates of net immigration through 2026 will support economic growth, adding an average of about 0.2 percentage points to the annual growth rate of real GDP over the 2024–2034 period. . . .

The downward revision to economic growth resulting from higher projected interest rates is partly offset by an increase in economic activity over the 2024–2027 period stemming from greater projected net immigration. . . .

That greater immigration is projected to boost the growth rate of the nation’s real gross domestic product (GDP) by an average of 0.2 percentage points a year from 2024 to 2034, leaving real GDP roughly 2 percent larger in 2034 than it would be otherwise. . . .

The US is not suffering economically from its aging population and low birth rates because immigrants of working age are taking up the slack; this is so important that even a small adjustment to the expected number of immigrants (from last year's projection to this year's, a difference of less than 5%) yields measurably increased economic growth. For the forseeable future, this makes our aging population sustainable.