Trump revoking legal status of more than half a million migrants: US labor mkt implication

This news has been in the works, but the announcement has been made – Trump’s administration will revoke the temporary legal status of more than half a million migrants from Cuba, Haiti, Nicaragua and Venezuela:

• these migrants have been warned to leave the country before their permits and deportation shield are cancelled on 24 April

More here.

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This is something to watch with respect to the US labour market:

• many of these migrants have been legally working in the US under the humanitarian parole program
• the revocation is likely to lead to some short-term disruption (shortages) in the labor market, particularly in industries that heavily rely on immigrant labor, such as agriculture, construction, hospitality, and healthcare
• its likely to lead therefore to higher wage costs (higher wages) if basic supply and demand economics holds

There will be flow-on effects such as lower payments made into Social Security and Medicare also.

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Market participants, including the Federal Reserve, will be keeping an eye on the higher costs and other economic impacts. At the margin the impact is likely to be the Fed holding rates for longer, they keep telling us they are trying to assess economic developments as policies flip and flop (tariffs on and off and on and off and so on). If you are a trader it’ll pay to keep an eye on developments also.

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The latest from the FOMC:

• Forexlive Americas FX news wrap 19 Mar: Fed keeps rates unchanged. See two cuts in 2025

IKR?

This article was written by Eamonn Sheridan at www.forexlive.com.