The US fertility rate reached a new low of 1.6 in 2024, and net immigration started declining rapidly that same year. This combination of factors has brought the rate of population growth to a historic low, a development with major economic implications.

Economic Implications

Perhaps the most obvious consequence is lower overall output growth. Economic growth generally comes from an increase in the labor force or more output per worker. In the US, the latter has averaged about 2% annually over the past century, with variation that does not correlate in an immediately obvious way with labor force growth.

The Congressional Budget Office projects that deaths will start to exceed births in 2030 and assumes that net migration will be high enough to offset this natural population decrease until well into the 2050s. Without positive net migration, though, the total population would start to shrink around the end of President Donald Trump’s second term.

Possible Solutions

Policymakers can respond to the population growth slowdown in numerous potentially productive ways. They can try to increase fertility rates (or slow down their decrease), though efforts in that area have, at best, a mixed record. The US could also admit more illegal immigrants (and let more of those already here stay). That approach has direct positive consequences for growth and the fiscal outlook.

Original reporting: KRDO (Colorado Springs metro) — read the source article.