As has been stated before, some see demography as destiny. This is due to population growth being, along with productivity and number of hours worked, the key components of economic growth as quoted by Paul Samuelson, the Nobel Prize economist.
Against that backdrop, we have the following data from the US Census Bureau’s “Population Clock”. One person is born in the US every 9 seconds. One person dies every 10 seconds. One international immigrant (net) comes to America every 22 seconds. All this results in a net population gain of one person every 16 seconds. This data is based on estimates from the 2020 census, the last hard count done by the government agency.
Forward to 2025. So far, the Trump administration claims 400,000 immigrants (about half the population of Delaware) deported and another 1.6 million leaving the US voluntarily. This out migration was not in the 2020 estimates.
In 2020, the Census Bureau estimated the US population to be about 331,886,000. It is now estimated to be 342,870,000. A reduction of 2 million from this figure takes about 18 percent off the population growth during this 5-year period. More to the point, it slows population growth to a crawl. With only one person being born every ten seconds and one person dying every nine, population growth slows to 50,170 per year net of deaths. For a population of 340 million this is nothing. Further, with the population aging, these numbers will soon reverse themselves.
According to the current administration, only 35,000 people who qualify will be awarded citizenship per year, with a priority given to South Afrikaners. Last year over 1 million people were awarded citizenship. To answer the question of why immigrants have not become citizens: there are never enough openings for citizenship. Some immigrants have entered the lottery for citizenship for over 20 years and have not won.
Immigration is often framed as a political issue, as it has been around in this country since the 1870s, when people in California objected to Asians being imported to build the transcontinental railroads. Against this backdrop is the compelling economic case for immigrants which also goes back again to the 1870s. Without Asians, the railroads may still have been built but at far higher cost and with a longer completion time.
An effort to reach a sensible political solution on immigration has proven elusive. There are issues such as: what skills do we want the immigrant to possess, can he buy his way in, do we grandfather those who are already here, do we toughen language laws for admission, and so on. Bear in mind in the case of qualifications, the four areas most impacted by immigration restrictions are construction, agriculture, health care, and retail; the latter includes restaurants, lodging, and transportation. Many of these areas do not require so much skill as motivation. Immigrants have as a group shown such motivation in spades.
A compromise might be a worker visa program. If a person works in this country for two 5-year terms, he or she would qualify to apply for citizenship. They would need to generate wage or other taxable income the IRS can track. They cannot be paid under the table by employers out to exploit them. (Such employers should be imprisoned). If convicted of a felony, the visa worker will be deported. If they have no work during the 5 years, they will need to return to their former country in time. They cannot collect federal benefits while on a worker visa but will be entitled to the benefits once citizenship is conferred. States can offer benefits, but only at their own expense and option. They will pay Social Security and Medicare taxes.
In 1996, Ross Perot ran for President as an independent. His campaign was made famous by his reference to a “giant sucking sound” of jobs being taken out of the country through the North American Free Trade Agreement which was being debated at the time. If America is serious about bringing industrial production back to the US, it needs workers who will fill the jobs. Given the slow population growth of the country and its aging projections, it is not realistic to rely on the US to internally provide all the workers needed.
The Economy
Now that the government statisticians have decided there will be no data reported for the time of the government shutdown (October), we will have to wait until sometime in December for government indications of economic activity for November. This jeopardizes matters like the ability of the Federal Reserve to reduce interest rates.
What data we have from the private sector shows an economy being carried by the wealthy and retired as the lower and younger economic strata gets impacted by rising insurance, health care, food and housing costs. Upper levels have the same impacts, but they have their rising investments to insulate them. Efforts to repeal tariffs on food and fuel will help somewhat. However, crops not harvested domestically paint a grim picture when discussing getting food prices under control. AI (Artificial intelligence) is touted as an economic activity generator, but matters such as the availability of electricity, impact on water supplies, capital requirements and the like show there is a distance between the cup and the lip. Almost one in four currently unemployed people have a college degree, a record.
Inflation
Inflation data was a casualty of the recent government shutdown. In truth, inflation data has not been reliable since tariffs were enacted. Many importers increased shipments into the US prior to the import designation deadline, only to cut back until the shipment pipeline had been cleared.
There is a feeling that the “Black Friday” sales may mark a low point for prices unless the Supreme Court forces a repeal of the tariffs imposed. Trade and commerce have become political pawns of the Trump and Xi administrations. The people of both countries are paying a price.
Interest Rates
Interest rates will likely continue to surprise on the upside. The unwinding of a trade that focused on borrowing Yen in Japan to buy US debt (called the Yen carry trade) is unraveling as Japan embraces growth and higher domestic interest rates. An estimated $150 billion in US debt will need to find new owners in the next two weeks.
Ahead, there will be a focus after the New Year on the need to yet again increase the National Debt ceiling which could max out as soon as the end of January. The $2 trillion plus deficit booked last fiscal year (ending September 30) has eaten up much of the debt ceiling negotiated last time. Add to that the demands for “progress” on the Epstein situation by January 31, and another shut down may be in the works.
The Stock Market
The atmosphere in the stock market could best described as after the Titanic hit the iceberg but before the orchestra started playing “Nearer My God to Thee”. There is a sense that something is amiss, but it is not clear exactly what or how it will affect stocks going forward.
Against this backdrop, there are all sorts of predictions. Many are in conflict, but few will be proven right. History has shown that when a market is overvalued, the most overvalued sectors are the ones to go down the most in the ensuing correction. Having said that, no one can tell when the correction will take place. The next generation of market leaders will likely come from sectors such as health care, energy, and domestic production.
Warren M. Barnett, CFA
November 25, 2025
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