Businesses that serve consumers or hire workers learned why things have gotten better in the form of good news from the Census Bureau. The U.S. population grew by one percent in 2024 (using July-to-July measures). The bureau wrote, "...this is the fastest annual population growth the nation has seen since 2001." But slimmer pickings may be in the future.

The U.S. economy has been constrained by its labor force in recent years, even before the pandemic. Economic thinking, especially among politicians, has been stuck in a Keynesian mindset: Stimulus is needed to get jobs for unemployed people. But since 2018, unemployment has been low and companies have plastered "Help Wanted" signs across their buildings, on their trucks and on advertisements. But the good news may end soon, with tighter immigration practices.

The Census Bureau this week conceded an intra-government disagreement. In January 2024 the Congressional Budget Office issued a report that estimated much higher immigration than Census had found. The difference was huge, with Census saying 1.1 million immigrants in 2023 but CBO saying 3.3 million.

I concluded in my analysis of the two estimates, "For the overall economy, the CBO estimates paint a much brighter picture than do Census Bureau figures." And though Census did not arrive at exactly the same figures as CBO in their latest estimates, the two are close.

Higher immigration painted a brighter picture that begins with the labor force. Employment gains in the past few years had surprised many of us economists, who wondered where employers were finding their workers. Immigrants have enabled businesses to expand much more than they otherwise could have.

The working immigrants also spent money, helping to boost total consumer spending growth.

Companies wondering if the increased immigration dictates boosting security expenditures may want to consider a recent study published in the American Economic Review: Insights which found, "... relative to the US-born, immigrants' incarceration rates have declined since 1960: immigrants today are 60 percent less likely to be incarcerated...."

All is not rosy for the future, however. President-elect Trump has vowed to stop some of the programs that have allowed people seeking asylum to enter the country, as well as to close the border to those entering without legal grounds. There may be some benefit from these policies, but business leaders pondering their 2025 plans will want to focus on their own labor needs. Fewer immigrants, and possibly deportations of those already here, warrant three strategies which can begin right way.

Increased productivity should be the first effort. That comes not by whipping employees harder but by providing better tools, better training and better first-level managers. (These strategies have been described in past Forbes articles listed here.)

Higher employee retention is the second important strategy when abundant job applicants are unavailable. The first-level managers play the largest role in retention, but top-level leadership must ensure that the managers have the time and resources to support their employees.

Better recruiting, the third strategy, will be easier with higher retention, as the company will get more employee referrals for new hires as well as a good reputation in the community.

On the consumer spending side of the ledger, fewer immigrants won't sink the aggregate numbers but will affect some immigrant-heavy neighborhoods. Investments in the kinds of stores and housing used by new immigrants should be taken with very serious consideration of the likely political changes.

Businesses that employ low-skilled workers have benefited from the surge of immigration that came in the last few years, but now must re-think their business plans.