The latest jobs report, delayed for almost seven weeks by the government shutdown, finally came out on Thursday and we learned that job growth in September exceeded expectations — coming in at 119,000 net new jobs, an improvement on August, which saw a net loss. The White House took the occasion to celebrate. But the summary provided by the Bureau of Labor Statistics juxtaposed the news with another key piece of information, noting, “employment edged up by 119,000 in September but has shown little change since April.”
Indeed, employment growth from May to September averaged just under 40,000 new jobs per month, which gives us a better indication of the employment picture: Right now, job growth is low. Given President Trump’s immigration crackdown and the attendant decline in net immigration, we need to start thinking about low job growth as the new normal.
Let me explain: Net immigration in 2025 is on track to be close to zero or even negative — more people will probably end up leaving the United States than entering for the first time in decades. Fewer immigrants overall means fewer immigrants entering the work force and fewer immigrants spending money.
We’re conditioned to think that job growth of 40,000 a month is a terrible omen for our economy — a sickly labor market or a sign of an impending recession. But if Mr. Trump’s restrictive immigration policies continue, it might simply be what the sustainable pace of new employment looks like.
The monthly new-jobs number doesn’t mean a whole lot on its own. For it to tell us whether employment growth is weak, healthy or overheated, we have to compare it with the number of job seekers.
If we have sustainable employment growth combined with a low unemployment rate, it tells us that the labor market is healthy: When the number of new jobs created is roughly in sync with the number of new job seekers, overall, employees’ wages should grow fast enough to increase their purchasing power but not so fast as to create unwanted inflation.
The sustainable pace of job growth just before the Covid-19 pandemic was about 100,000 new jobs a month by my calculations, lower than in prior years as more people reached retirement age. The post-pandemic surge in immigration changed all that; from 2022 to 2024, the estimated sustainable pace was around 200,000 per month as the influx of immigrants (often with temporary work permits) joined the labor force. Current immigration policy seems to have thrown that into reverse.
Over the next year, then, a healthy job market will probably mean a low unemployment rate of 4 to 4.5 percent (which is where we’ve been since early 2024) and job creation that hovers around the current pace. In July, Stan Veuger, Tara Watson and I published an analysis projecting that by 2027, the sustainable pace of net new jobs could fall to as low as negative 10,000, meaning fewer jobs each month than the month before.
Proponents of Mr. Trump’s approach to immigration tend to see it differently. Last year, then-Senator JD Vance essentially argued that fewer immigrants would lead to more job openings for native-born job seekers, particularly men, and that the resulting increase in wages would entice more native-born men to join the ranks of job seekers.
But I have my doubts. Empirical analyses suggest that reductions in immigration bring little change to the wages of native-born workers with skills similar to those of the immigrants who would otherwise be doing the same work. The percentage of native-born men between the ages of 25 and 54 in the job market has shown a long downward trend since 1960, with periods of strong wage growth doing little more than temporarily slowing the decline.
It was easy to predict that Mr. Trump’s immigration policies would reduce the number of people looking for work, what wasn’t always fully considered was that the choking-off of immigration would reduce labor demand as well: The immigrants who aren’t here because of Mr. Trump’s policies not only aren’t working here; they’re also not spending money here. When consumer demand for goods and services diminishes, business owners don’t need to hire as many people. No doubt, the costs and uncertainty created by Mr. Trump’s tariff policies have also led businesses to hire fewer people.
Jerome Powell, the chair of the Federal Reserve, has said that the labor market is in a “curious kind of balance.” It is remarkable that the number of available new jobs has come down almost in tandem with the drop in the number of available new workers. (This is not the case in every community and every sector; surely there are construction companies having trouble staffing their crews.)
Some Fed officials and other observers have worried that if the pace of job creation loses too much steam, it could tip the labor market into weakness and push the unemployment rate higher. Indeed, it made sense that the Fed stepped in to prevent that by modestly lowering interest rates.
Nonetheless, consider the flip side. In a world where the demand for new workers by employers remained at 2024 levels but the number of job seekers fell abruptly because of immigration policy, the Fed would have needed to either cool an overheated labor market or risk a situation where rising wages added to inflationary pressure. If we’re finding out that restricted immigration combined with high and ever-changing tariffs in fact reduced the overall need for labor, then those policies did the work that the Fed would have otherwise had to do.
Again, a good outcome in this economic environment will consist of a low unemployment rate with low or no employment growth. This will be something new for many Americans, who understandably connect a healthy job market with higher monthly jobs numbers.
A healthy job market, however, doesn’t necessarily mean a thriving economy. A smaller population resulting from lower immigration means a smaller economy well into the future. On top of that, more restrictive immigration means fewer working-age immigrants paying taxes, even as many of them wait years to get most federal benefits (or never become eligible for them). Finally, economists link immigration to productivity growth.
In other words, making America less hospitable to immigrants will eventually make America poorer.
Wendy Edelberg is a senior fellow in economic studies at the Brookings Institution and a principal at WestExec Advisors.
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