Trump’s Immigration Crackdown Is Hurting Job Growth More than His Tariffs Are

By Jacob Weindling | September 17, 2025 | 3:45pm

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Trump’s Immigration Crackdown Is Hurting Job Growth More than His Tariffs Are

The entity tasked with spearheading the U.S. and the global economy through the uncertainty the future presents had its monthly-ish meeting today. The stock market got its wish as the Federal Reserve cut rates by 0.25 percent, something of a devil’s bargain because the reasons the Fed did so are not what one would call bullish, but bad news is good news is a logical thought in ZIRP land. Next year is sure to be a volatile year for what some are calling the most expensive stock market in history.

While Fed Chair Jerome Powell echoed many of the same stagflationary concerns he has made since Trump entered office, the headline in my book was his response to a question about whether tariffs are driving weaker employment figures. He said that in the Fed’s assessment, the uncertainty and additional expenses presented by Trump’s tariffs are not having a large impact on the weak jobs numbers right now, and that weakness is coming more from immigration. We are experiencing an historic drop in immigration as we live through Stephen Miller’s attempt to make good on Trump’s joke that this country would only have 100 million people and they would all look like Miller if it were up to him. The Fed Chair clearly stated that the drop in labor force growth driven by Miller’s racist policies is most responsible for the weak jobs figures that made Trump throw a temper tantrum and fire the head of the Bureau of Labor Statistics.

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Preliminary data shows that 1.2 million immigrants are gone from the U.S. workforce under Trump. Trump-voting farmers are reporting labor shortages they voted for that are so economically calamitous for them they now have to sell their animals. I had previously suspected that the chilled spending environment created by Trump’s brilliant strategy of “you will pay less in tariffs later” was primarily responsible for a world where there are now more unemployed people than jobs available in Trump’s America, but the Fed says that’s not the case. It’s the immigration crackdown having a bigger effect of pulling people out of work and stopping new immigrants from coming here both legally and not, creating the mismatched labor force of humanities majors needing to pick strawberries that Trump’s economic team so badly wants. This racist policy has necessitated interest rate cuts because it created a weakening economy.

“Nearly a third of companies reported having been directly or indirectly affected by immigration policies in the past six months, compounding the problem faced by 92 percent of respondents, who reported difficulty finding workers,” wrote El País about a late August survey conducted by the Associated Contractors of America and the National Center for Construction, Education and Research. “Specifically, 5 percent of respondents said their sites have been raided by immigration agents, and an additional 10 percent have seen their workers leave due to rumors of possible action by authorities.” In the July Dallas Fed Survey, 13 percent of respondents reported an impact from immigration policy changes. The thing Trump said he knew would happen is happening, and his racist deportation agenda is hurting the economy, which still is stuck between a monetary policy rock and a hard place, according to Powell. Tariffs seem to be more of an inflation concern than a growth concern at the Fed.

Next up from @nicktimiraos.bsky.social: Does the economic backdrop no longer warrant a restrictive policy setting?

A: I wouldn’t say that. The risks were clearly tilted towards inflation, and have no moved meaningfully towards equality, and that means we should move towards neutral.

— George Pearkes (@peark.es) September 17, 2025 at 12:41 PM

Powell said today that the recent declines in the growth rate for both the number of people looking for jobs and those gaining employment have “certainly gotten everyone’s attention,” said “that downside risk is now a reality.” The Fed cut rates today not because they are primarily worried about economic growth, but “in light of the shift in the balance of risks” in a statement that took out its previous reference to the labor market as being “solid.” The world Trump is delivering us into with lower immigration and an aging population is one with lower economic growth, this is an economic fact known across the entire ideological spectrum. It’s why everyone is terrified to buy 30-year European debt.

“Certainly economies can function with very low population growth,” Tara Watson of the conservative American Enterprise Institute said to the Wall Street Journal last month in a story about America’s shrinking labor force. “There’s just less dynamism and less income per capita usually in the long run.” I can’t think of many better descriptions of Trump’s economy to date.