Senior analysts say that the next five years can see “the lack of growth in workers at all” and sends a warning about the fate of the American economy
Since the American labor market shows clear signs of procrastination, one of the prominent strategies in Wall Street shows a sharp warning: with the presence of the workforce in America in a demographic crisis and historical changes in the current immigration policy, it is possible that the next five years will not see any growth in workers at all. ”
The effects of David Kelly, chief international strategic expert at JPMorgan Asset Management, are deep for the Federal Reserve and Investors – among them, the need to exercise exceptional caution before lowering interest rates.
Kelly used his usual research note “notes next week” to survey the implications – perhaps assess the damage – from Summary job report on FridayWhich I reviewed the creation of job opportunities in May and June by 258,000 jobs. Moreover, employers added only 73,000 jobs in July, much less than the unanimity of 110,000. Leave this average monthly increase for the past quarter in 35,000 jobs. The unemployment rate increased to 4.2 % in July, as both employment numbers and workforce sharing declined.
Kelly also highlighted the signs of distress in the labor market, that is, a decrease in the rate of employment from 62.65 % in July 2024 to 62.22 % in July 2025. This translates into approximately 1.2 million people from the age of 16 or more who work or actively search for a job.
About half of this decline was attributed to the Americans who retire to retirement, but indicated that the participation rate has also decreased between those between the ages of 18 and 54.
Kelly commented on these tight signs as a pivotal context of the broader question of a labor offer in the economy, with long -term trends indicating that the federal reserve and A trapped chair Jerome Powell He will face major challenges in fighting inflation to go foot All market reduction prices want a lot.
The problem of the worker in the economy
The contestants and the decline in employment participation also speaks to a deeper structural challenge and will continue in the future.
According to statistics expectations, he pointed out that the population of the work will actually contract in the coming years without the return of immigration to the previous levels.
Kelly highlights the predictions of the census that residents between the ages of 18 and 64 will actually decrease by more than 300,000 people per year ending in July 2026, and continue to decrease in this pace until almost 2030. It indicates that the wave of retirement and modern changes in the main immigration programs increases work supplies, which reduces potential growth.
Federal dilemma: inflation, growth and political pressure
This pressure comes at a time when the federal reserve is undergoing huge political pressure to reduce interest rates, as President Trump and his allies call for easier funds to compensate for the effects of the new customs tariff and support the mark -full markets.
However, Kelly argues that the central bank must take carefully, as lowering the narrow labor market rates stimulates wages and enlarged prices instead of accelerating economic growth.
He noted that American economic growth has reached average of 2.1 % annually since the beginning of the twenty -first century, largely driven by an annual increase of 0.8 % in the workforce.
He added: “Starting from a point of almost full employment, due to the continued retirement of the children’s mutation and the possibility of deporting and leaving immigrants completely in compensation for new immigration in the next few years, it is completely possible that the next five years will not see any growth in workers at all.”
If this happens, the economy will grow more slowly, as Kelly predicted.But you will only be able to grow more slowly without igniting high inflation”
He adds that the message is clear, as it is very careful about any price cuts. For investors, it is a warning to expectations of expectations to achieve rapid economic gains or a continuous bull market led by easy money. In other words, America “Exceptional“Not given, and move forward.
Investors said, “It should not be widespread on the rise of the economic tidal in the United States or the low interest rates,” said investors.
For this story, luck The artificial intelligence is used to help with a preliminary draft. Check an editor of the accuracy of the information before publishing.
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