Goldman Sachs: US Immigration Slump to Reshape Labor Market and Lower Job Growth Targets

Goldman Sachs projects a significant shift in the US labor market as net immigration is expected to plummet to 200,000 by 2026. This represents an 80% decrease from the annual average of 1 million seen over the previous decade, primarily driven by tighter immigration policies and visa restrictions. Consequently, the 'breakeven' pace of monthly job creation required to maintain a stable unemployment rate has fallen from 70,000 to just 50,000. While this lower threshold may lead the Federal Reserve to view weaker Non-Farm Payroll (NFP) data as less recessionary, labor demand remains fragile. The report also highlights AI as a critical downside risk that could accelerate job losses or further dampen hiring activity. Investors should monitor how these structural changes influence long-term economic growth and the Fed's monetary policy trajectory.