Fed Chair Jerome Powell Blames Influx of Illegal Migrants for Rising Unemployment Rate; Powell Says Immigration Surge Boosted Unemployment Rate

Fed chair Jerome Powell blames influx of illegal migrants for rising unemployment rate:

Federal Reserve Chairman Jerome Powell blamed the migrant crisis for the nation’s growing unemployment after cutting the benchmark interest rate by 0.5 percentage point on Wednesday for the first time since early days of COVID-19.

“If you’re having millions of people come into the labor force, then — and you’re creating 100,000 jobs — you’re going to see unemployment go up,” Powell told reporters, answering a question about the nation’s current monthly job creation.

“So it really depends on what’s the trend underlying the volatility of people coming into the country.”

“We understand there’s been quite an influx across the borders, and that has actually been one of the things that’s allowed the unemployment to rise,” he said, according to the Wall Street Journal.

“And the other thing is just the slower hiring rate, which is something we also watch carefully. So it does depend on what’s happening on the supply side.”

Powell’s comments come after the Fed accelerated its plan to cut interest rates — originally thought to be just 0.25 percentage point — over concerns about rising unemployment and slowing growth in recent months.

The unemployment rate has been steadily creeping upwards over the last year, with a particular spike in the spring, according to figures from the US Department of Labor. —>READ MORE HERE

Fed’s Powell says immigration surge boosted unemployment rate:

Federal Reserve Chair Jerome Powell said Wednesday that immigration is helping push the unemployment rate higher as they enter the labor force and look for jobs.

Powell was asked about whether the level of job creation in the economy, which has been a little more than 100,000 on average for the last three months, is alarming and if the labor market can continue slowing down through fewer job openings as opposed to job losses.

“On the job creation… it depends on the inflows,” Powell said. “So if you’re having millions of people come into the labor force, and you’re creating 100,000 jobs, you’re going to see unemployment go up. So it really depends on what’s the trend underlying the volatility of people coming into the country.”

“We understand there’s been quite an influx across the borders, and that has actually been one of the things that’s allowed the unemployment [rate] to rise. And the other thing is just the slower hiring rate, which is something we also watch carefully. So it does depend on what’s happening on the supply side,” he explained.

The unemployment rate has risen in recent months amid a slowdown in hiring. It reached 4% in May for the first time since January 2022 and hit 4.3% in July, before declining to 4.2% in August.

Powell’s comments come after the August jobs report showed a decline in employment among native-born workers while the number of employed foreign-born workers rose in the past year.

The Bureau of Labor Statistics (BLS) noted that in the past 12 months through August, native-born American workers lost over 1.3 million jobs, while foreign-born workers gained more than 1.2 million jobs in that span.

As of August, the BLS estimated there were 129,712,000 native-born workers — down from 131,031,000 in August 2023. By comparison, there were 31,636,000 foreign-born workers in August — an increase from 30,396,000 compared to a year ago. —>READ MORE HERE

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