Joyce Chang, JPMorgan’s Chair of Global Research, highlights the significant role immigration is playing in bolstering the U.S. economy, which has been largely overlooked.
Despite global challenges, including inflation concerns and high interest rates, the U.S. economy displays resilience, with the Federal Reserve revising its GDP growth projection for 2024 upwards.
Chang emphasises the positive impact of immigration on consumption and employment, attributing part of the recent economic growth to the surge in immigration. Additionally, she discusses the implications of immigration on inflation, fiscal deficit, and government spending, suggesting a continued need for a cautious monetary policy stance.
1. Joyce Chang, Chair of Global Research at JPMorgan, underscores the underestimated role of immigration in boosting the U.S. economy amidst global challenges.
2. The U.S. Federal Reserve revises its GDP growth projection for 2024 upwards to 2.1%, reflecting the economy’s resilience despite inflationary pressures and high interest rates.
3. Despite tight monetary conditions, the labour market remains strong, with unemployment staying below 4% and the economy adding 275,000 jobs in February.
4. Chang highlights the significant contribution of immigration to increased consumption and employment, citing a nearly 6 million rise in the U.S. population over two years.
5. She notes that immigration also adds upward pressure on wages, housing costs, and energy prices, which could impact inflation dynamics.
6. While immigration remains a political issue, Chang argues that it generates more revenue than expenses and is beneficial for the economy overall.
7. Other factors contributing to the U.S. economy’s outperformance include its high fiscal deficit and energy independence compared to struggling economies like Europe.
8. JPMorgan anticipates only a “shallow” loosening cycle from the Federal Reserve, with inflationary pressures persisting due to high government spending and continued immigration.
9. Chang suggests that increased government spending ahead of the U.S. government’s fiscal year-end on September 30 will likely sustain inflationary pressures, supporting a “higher for longer” scenario.
