Drop in unauthorized immigration slows job growth, SF Fed paper finds

The recent decline in unauthorized immigration to the United States is creating unexpected ripple effects across key economic sectors, with profound implications for industrial workforce dynamics and market labor supply chains.

According to groundbreaking research from the San Francisco Federal Reserve, the sharp reduction in unauthorized immigrant worker flows has directly correlated with substantial declines in employment growth, particularly in construction and manufacturing sectors. The study reveals that regions experiencing the most significant immigration slowdowns have simultaneously encountered the most pronounced employment contractions.

The economic implications are substantial: U.S. job additions plummeted to just 181,000 in 2025, a stark contrast to the 1.459 million jobs added in 2024. This market rotation suggests a potential shift toward more defensive economic strategies.

Fed economists Daniel Wilson and Xiaoqing Zhou highlighted that the construction sector has been especially vulnerable, with falling unauthorized immigrant worker flows potentially decelerating residential construction and constraining housing supply growth. The Trump administration maintains that these immigration reductions will ultimately benefit American workers and improve housing affordability.

For precious metals investors, these workforce dynamics signal potential disruptions in industrial demand and infrastructure development. Reduced construction activity could indirectly impact silver and copper demand in manufacturing and renewable energy sectors, making workforce migration trends a critical economic indicator to monitor.

Looking forward, the research suggests continued downward pressure on U.S. employment growth as long as unauthorized immigrant worker flows remain constrained. Investors should closely watch these labor market transformations for their potential broader economic and investment implications.