As US population growth slows, we need to reset expectations for economic data

US population growth has slowed sharply in the last year and a half, as the immigration surge of the early 2020s has ended and the population continues to age. Fewer jobs are needed to keep up with the growth of the labor force, and growth rates of output and consumption will fall even if per capita output and consumption hold steady. The total US population is growing at an annualized rate of 0.5 percent, down from 1 percent in late 2023. Kolko estimates that the breakeven rate of monthly payroll growth in the jobs report needed to keep up with the labor force has fallen from 166,000 jobs in early 2024 to 86,000 jobs in June 2025. Accordingly, policymakers need to lower their targets and forecasts for key economic data and put more weight on per capita and other population-invariant measures. Adjusting expectations in light of slower population growth is essential for setting monetary policy, determining whether the United States is in recession, and other data-driven decisions and interpretations. With slower population growth, any given level of monthly payroll growth, consumption growth, or output growth reflects a stronger economy than it did a year ago. Population growth is not only slowing; it has also become more volatile and harder to estimate. It is likely that current population estimates for 2025 that statistical agencies are incorporating into economic data are too high and will be revised downward; current population estimates imply much higher immigration in 2025 than is likely under current administration policy. Economic data will need to be reinterpreted and revised in line with future adjustments to population estimates.