As US population growth slows, we need to reset expectations for economic data
As US population growth slows, we need to reset expectations for economic data was written by Jed Kolko in 2025. It was published by the Peterson Institute for International Economics in their policy brief series.
The author explores how economic benchmarks must be recalibrated given recent demographic trends.
The population is now growing at about 0.5% per year, driven by slowing immigration surge and an aging population.
The breakeven rate describes how many jobs must be created in a month to maintain current employment rates. Given an overall employment rate of 60%: "[o]ne year ago, the adult population was growing at 300,000 people per month, implying a breakeven rate of 300,000 * 60% = 180,000 jobs per month." Note however that this simplistic calculation ignores distribution of age in the workforce. The author estimates the breakeven rate is "86,000 jobs [per month] in June 2025".
The Census Bureau revised the 2024 Vintage estimates upwards by 3.6 million in December 2024. This was largely driven by improved estimates of immigration. Projecting out, the expectation is that the the U.S. will see "net international migration of 1.2 to 1.4 million in 2025". The Trump administration's policies towards immigration may have an impact on that trend, which would in turn depress population growth and bring the breakeven rate even lower.
Currently, the payroll survey and household survey are estimating significantly different job growth rates. "From January to June 2025, employment has increased by an average of 134,000 per month in the payroll survey, ... and by only 26,000 per month in the household survey". This divergence indicates significant uncertainty about the current state of the job market.
As a result of these trends and complications, the author argues that "policymakers should put more weight on per capita economic measures". Approximately-population-invariant statistics should be more certain right now.
The author also calls for economic projections to be explicit about population growth estimates used for calculations.