Around half of U.S. jobs gains may be from undocumented immigrants
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AROUND HALF OF U.S. JOBS GAINS MAY BE FROM UNDOCUMENTED IMMIGRANTS
Around half of U.S. jobs growth this year has likely come from undocumented immigrants, which may suggest that the labor market is not as strong as thought, according to analysts at Standard Chartered Bank NY Branch.
Steve Englander, Head, Global G10 FX Research and North America Macro Strategy, and Dan Pan, Economist, Americas, estimate that undocumented workers account for 109,000 jobs out of the average 231,000 monthly increase in jobs so far this year.
That is based on an examination of detailed data from U.S. Customs and Border Protection and U.S. Citizenship and Immigration Services.
They also note that they may be underestimating this figure “since undocumented immigrants often have limited access to benefits, so they may be heavily motivated to find employment.”
The analysts define undocumented immigrants as “those who entered the US through non-traditional immigration pathways, such as asylum seekers, parolees and refugees” and are counting those that have an Employment Authorization Document.
Based on this evaluation, the U.S. economy may not be as strong as thought, and that may have consequences for the U.S. Federal Reserve.
Standard Chartered estimates that nonfarm payroll (NFP) gains may be around 125,000 per month excluding these workers. “Such a pace is not recession but is hardly boom time and represents a moderate underlying pace of labour demand,” the analysts said.
That should make the pace of headline jobs growth “less worrisome” to Fed officials, who “might be less hawkish if the impact of undocumented immigrants on NFP was well estimated and understood,” they said.
(Karen Brettell)
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