A man says goodbye to a woman as federal agents detain him following an immigration court hearing at the Jacob K. Javits Federal Building in New York on June 10. Photographer: Adam Gray/Getty Images.
The Trump administration’s curbs on immigration and ramped-up deportations will lower U.S. economic growth by almost a full percentage point this year, according to a study from the Federal Reserve Bank of Dallas. Economists including Pia Orrenius found that the drastic drop in immigrants across the southern border and increased efforts to deport more foreign-born workers could subtract about 0.8 percentage point from gross domestic product (GDP) in 2025.
The researchers—who acknowledged that the limited availability of historical data makes their findings highly uncertain—examined how five different scenarios featuring decreased immigration would impact GDP and inflation. They found the biggest hit would be to growth, with a slight increase to inflation this year from the new policies.
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Immigration at the U.S.–Mexico border dropped sharply last year and continued to decline after President Donald Trump’s election. Trump has initiated a large-scale effort to deport undocumented immigrants and has encouraged immigrants to leave by removing deportation protections for many foreign nationals.
The reduction in border crossings—not deportations—is the biggest driver of the hit to growth, the researchers found, accounting for 93 percent of the projected GDP reduction. However, the researchers found that should the administration move forward with a “mass deportation,” in which 1 million immigrants are removed per year by the end of 2027, that scenario would reduce annual GDP growth by nearly 0.9 percentage point by the end of 2025 and by 1.5 percentage points by the end of 2027.
Economists expect U.S. growth to cool to a pace of 1.5 percent in 2025, according to a Bloomberg survey, from close to 3 percent in each of the previous two years.
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