U.S. commuters.Caroline Purser | The Image Bank | Getty ImagesThe recent surge in immigration into the U.S. is helping to bolster the economy despite a raft of global challenges, according to Joyce Chang, chair of global research at JPMorgan.The U.S. Federal Reserve on Wednesday raised its U.S. GDP growth projection to 2.1% for 2024, up from 1.4% in its December outlook, as the economy continues to display resilience despite high interest rates as the central bank seeks to manage inflation levels.Meanwhile, the labor market has stayed relatively hot despite tighter monetary conditions, with unemployment remaining below 4% in February and the economy adding 275,000 jobs.The Fed also raised its projections for its preferred measure of inflation: core personal consumption expenditure. It now expects the core PCE to come in at 2.6%, up from 2.4%, after January and February inflation prints dampened hopes that price increases were fully under control.The core consumer price index, which excludes volatile food and energy prices, rose 0.4% in February on the month and was up 3.8% on the year, slightly higher than forecast.”We are still seeing the phenomena around the globe that services inflation is still well above where it was before the pandemic, so we’re looking at 3% for core CPI, but I think one thing that was really underestimated in the U.S. was the immigration story,” Chang told CNBC’s “Squawk Box Europe” on Thursday.”The U.S. population is almost 6 million higher than it was two years ago or so, and so that has accounted for a lot of the increase in consumption, when you see the very low unemployment numbers as well.”She noted that upward pressure on wages and housing costs, along with a resurgence in energy prices so far this year, suggest that the Fed is “not out of the woods yet” when it comes to inflation.A recent Congressional Budget Office report estimated that net immigration to the U.S. was 3.3 million in 2023 and is projected to remain at that level in 2024, before dropping to 2.6 million in 2025 and 1.8 million in 2026.Immigration, and particularly border crossings, is among the hottest topics in the run-up to the November presidential election. Chang suggested that other events could exacerbate the issue, particularly the unfolding situation in Haiti.However, she argued that in terms of net impact on the economy, immigration is “a good thing.””From everything that we have seen, the revenues that are generated exceed the expenses. Now it is a political issue, …
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[mwai_chat context=”Let’s have a discussion about this article:nnU.S. commuters.Caroline Purser | The Image Bank | Getty ImagesThe recent surge in immigration into the U.S. is helping to bolster the economy despite a raft of global challenges, according to Joyce Chang, chair of global research at JPMorgan.The U.S. Federal Reserve on Wednesday raised its U.S. GDP growth projection to 2.1% for 2024, up from 1.4% in its December outlook, as the economy continues to display resilience despite high interest rates as the central bank seeks to manage inflation levels.Meanwhile, the labor market has stayed relatively hot despite tighter monetary conditions, with unemployment remaining below 4% in February and the economy adding 275,000 jobs.The Fed also raised its projections for its preferred measure of inflation: core personal consumption expenditure. It now expects the core PCE to come in at 2.6%, up from 2.4%, after January and February inflation prints dampened hopes that price increases were fully under control.The core consumer price index, which excludes volatile food and energy prices, rose 0.4% in February on the month and was up 3.8% on the year, slightly higher than forecast.”We are still seeing the phenomena around the globe that services inflation is still well above where it was before the pandemic, so we’re looking at 3% for core CPI, but I think one thing that was really underestimated in the U.S. was the immigration story,” Chang told CNBC’s “Squawk Box Europe” on Thursday.”The U.S. population is almost 6 million higher than it was two years ago or so, and so that has accounted for a lot of the increase in consumption, when you see the very low unemployment numbers as well.”She noted that upward pressure on wages and housing costs, along with a resurgence in energy prices so far this year, suggest that the Fed is “not out of the woods yet” when it comes to inflation.A recent Congressional Budget Office report estimated that net immigration to the U.S. was 3.3 million in 2023 and is projected to remain at that level in 2024, before dropping to 2.6 million in 2025 and 1.8 million in 2026.Immigration, and particularly border crossings, is among the hottest topics in the run-up to the November presidential election. Chang suggested that other events could exacerbate the issue, particularly the unfolding situation in Haiti.However, she argued that in terms of net impact on the economy, immigration is “a good thing.””From everything that we have seen, the revenues that are generated exceed the expenses. Now it is a political issue, …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]
