US labor market faces shrinking breakeven job growth amid immigration cuts

Economists warn that tighter immigration policies under President Donald Trump and a wave of baby‑boomer retirements are lowering the US labor‑force participation rate. A Dallas Federal Reserve report found the breakeven rate – the number of new jobs needed each month to keep unemployment steady – fell to about 50,000 in 2024, down from over 200,000 in 2022‑23 when immigration was higher. Oxford Economics projects the breakeven rate could turn slightly negative by 2028 if current trends continue.

Despite weaker payroll numbers, the analysts expect modest job growth to continue, especially in healthcare, which is less sensitive to the business cycle. They also note that the Federal Reserve is unlikely to intervene, as the unemployment rate may remain largely unchanged even with stagnant or shrinking payrolls.