Immigration limits and retirements could push U.S. job market into new equilibrium

Recent research indicates that the United States is approaching a labor market where job growth can stagnate without raising the unemployment rate. The decline follows President Donald Trump’s stricter immigration stance, which has reduced the inflow of foreign-born workers, and an accelerating retirement wave among baby boomers. Dallas Federal Reserve economists found the breakeven hiring figure dipped into negative territory during parts of 2025, while Oxford Economics now estimates it at about 50,000 jobs per month, down from more than 200,000 a few years earlier.

Economists Matthew Martin and Bernard Yaros project the breakeven rate could reach zero next year and become slightly negative by 2028, assuming current policies persist. They note that modest job gains are likely to continue in relatively recession-proof fields like healthcare, creating only gentle pressure on the unemployment rate. The Federal Reserve is unlikely to alter policy solely because payrolls appear weak, as a stable unemployment figure would not signal sufficient weakness. BNP Paribas economists also warn that a Supreme Court decision ending temporary protected status could further shrink the documented labor force, prompting firms to retain workers more cautiously.