Recent analysis from Goldman Sachs indicates that former President Trump’s immigration policies are effectively curtailing the surge in border crossings that reached unprecedented levels during the Biden administration. A team of Goldman analysts, including Elsie Peng, David Mericle, and Alec Phillips, documented how net immigration, which peaked at 3.5-4 million annually in late 2023, has declined significantly to approximately 1.7 million by December 2024.
The Trump administration’s three-pronged approach includes enhanced border security measures, the reinstatement of the “Remain in Mexico” policy, and the termination of several humanitarian parole programs. Additionally, the administration is working to reduce legal
protections for certain immigrants currently in the United States, potentially affecting their work authorization status, while simultaneously increasing deportation efforts.
Goldman’s analysts project that net immigration will further decrease to 750,000 annually, comprising authorized immigrants exclusively, with unauthorized immigration effectively neutralized through approximately 500,000 yearly deportations balancing against similar numbers of asylum seekers and other entrants. This represents a return to pre-pandemic levels but with stricter controls on unauthorized entry.
The economic implications of these policy changes appear relatively contained, according to the analysis. While immigrant-driven labor force growth is expected to normalize by early 2026, the impact on GDP growth and inflation is predicted to be modest. The new immigration pace would result in a 30-40 basis point reduction in potential GDP growth compared to 2023-2024 levels, but only 5 basis points below pre-pandemic figures.
However, the analysts warn of a more severe economic scenario if heightened enforcement creates an environment where unauthorized immigrants, who constitute 4-5% of the total workforce and up to 20% in certain sectors, become hesitant to work or employers become reluctant to hire them. Such a situation could significantly disrupt affected industries and potentially trigger larger inflationary pressures.
To monitor these developments, Goldman has implemented real-time tracking systems for both authorized and unauthorized immigration flows, utilizing immigration court cases, government agency data, and daily arrest statistics. While significant changes haven’t been observed since the election, there is approximately a six-week lag in data collection.
The analysts are also closely monitoring labor market indicators, particularly focusing on recent immigrants’ participation rates, unemployment figures, job-finding rates, and survey response rates. They’re additionally tracking employment and wage data in industries with high concentrations of unauthorized workers. Current data shows only minor fluctuations in job-finding rates, with other metrics remaining relatively stable.
The immigration slowdown’s impact varies across different sectors of the economy, with some industries more heavily dependent on immigrant labor than others. The gradual nature of the transition is expected to allow for market adjustments without severe disruption to most economic sectors.
This shift in immigration patterns and enforcement policies could have significant political implications for the 2026 midterm elections, as the demonstrable success of border control measures may bolster support for MAGA-aligned candidates. The tangible results of these policies, particularly shown through immigration statistics, could serve as powerful campaign tools for candidates advocating stronger border security measures.