Politicians Might Clash on Immigration, but Wall Street Has Made its Mind: It Boosts the Economy

As immigration continues to dominate and divide in the public conversation, major companies trading on Wall Street are conveying a mostly unified message.

Last week, Goldman Sachs Group Inc. presented its updated predictions for economic and employment growth in the United States this year, adjusting for an accelerated rate of immigration. The company now forecasts a 2.4% year-on-year increase for US gross domestic product in the fourth quarter, a 0.3 percentage-point improvement compared to the previous estimate.

"One likely reason why GDP growth was stronger in 2023 is that immigration ran well above the recent historical average, boosting the size of the labor force and potential GDP," Goldman economist Ronnie Walker wrote in a note Sunday, as reported by Bloomberg. "We have updated our payrolls and GDP forecasts to incorporate the ongoing boost from above-trend immigration."

The Congressional Budget Office (CBO) had delivered a similar view in February when the nonpartisan agency announced that immigration is poised to inject a staggering $7 trillion into the gross domestic product over the next decade. This boost would be driven by the push newcomers are giving to the labor force and consumer spending.

The impact of the surging immigration was also highlighted by Janet Henry, global chief economist at HSBC Holdings Plc. In a note to clients last week, Henry said that "the impact of migration has been an important part of the US growth story over the past two years".

"Immigration is not just a highly charged social and political issue, it is also a big macroeconomic one," he added, as per Bloomberg.

While it's difficult to determine the exact number of foreign-born people migrating to the U.S., because many enter without visas or proper documentation, Goldman Sachs estimates that immigration reached approximately 2.5 million in 2023.

This number is significantly higher than the 1.6 million suggested by the change in the foreign-born population reported in the official household survey by the Census Bureau, Bloomberg reported.

The Gross Domestic Product generated by Latinos in the United States has already become a significant figure. In fact, if the 64-million community were a country, it would be the fifth-largest economy in the world, according to the Latino GDP Report 2023 by the Latino Donor Collaborative.

The assessment is less clear on the political front: both presidential candidates anticipate that the immigration issue will play a decisive role in determining the election turnout. About 28% of U.S. citizens surveyed in February stated that immigration is the most important problem facing the U.S., marking an increase of eight percentage points compared to the previous month, according to a Gallup survey.

In March, Biden's campaign has focused on highlighting Latino contributions to the country, as well as the rhetoric Trump has used regarding migrants and the Hispanic community.

"This election is an election between me and a guy named Trump," Biden said in the spot titled "Change". "This is a guy who calls Latinos criminals, drug dealers, and rapists. Now he says immigrants are poisoning the blood of our country."

On the other side, Trump's campaign tries to identify Biden as the responsible for "the daily chaos at the border", as described by MAGA Inc. spokesperson Alex Pfeiffer in a statement the NBC News reported.

Last Friday, MAGA Inc. released a 15-second spot titled "Biden's Invasion," which includes audio of Biden criticizing the border wall over video of migrants pushing through part of a border fence. "Nobody... Nobody is going to be deported," Biden's voice says. "There will not be another foot of wall constructed in my administration," the ad follows.