APRIL 2026 ISSUE

Analysis of the February 2026 Jobs Day Release

CAP analysis of the February 2026 employment report shows that President Trump’s promises to native-born workers have yet to materialize while reduced immigration is poised to have a negative effect overall on employment and wages in the long run. Debu Gandhi is Senior Director, Immigration Policy

Today’s employment report showed that unemployment edged up to 4.4 percent and the economy lost more than 90,000 jobs in February 2026—below expectations. Additionally, the prior two months of job growth were revised downward, pushing December negative as well. Population shifts may explain some of the suppressed growth, and February’s data give a better picture of these changes.

Today’s release also incorporates the annual population revisions into the household survey, which is used to calculate labor force statistics such as the unemployment rate and labor force participation. Adjusting the household survey weights using the updated population data highlights immigration trends that align with economists’ warnings under the Trump administration. The latest numbers show that net migration into the United States fell by more than half, and that reality is now reflected in the latest employment report. Moreover, new analysis from the Center for American Progress shows that despite President Donald Trump’s claims, native-born workers haven’t seen their wages or employment prospects rise under this new immigration approach.

-------

Population changes in the household survey At the beginning of each year, the U.S. Census Bureau releases its “vintage population estimates” for the past year. These estimates are used to adjust the monthly household survey for the coming year, but they are not retroactive. This can create sharp discontinuities in the data when looking at population levels. The 2025 vintage showed a significant slowdown in population growth driven by a historic decline in net international migration. Translating that into the Employment Situation report means that, beginning with the February data, there will be a large downward shift in the levels of measured employment overall—including by demographic characteristics such as race, ethnicity, gender, education level, and more. To manage these large swings, it is advisable to use rates, rather than levels, for comparison to prior years.

-------

Net international migration fell

This is not the first time in recent history the population estimate swung dramatically due to immigration: International migration fell substantially during the COVID-19 pandemic and later rebounded as the recovery progressed. In 2025, however, the Trump administration implemented numerous unprecedented policy measures to suppress immigration. These policies included massively increased immigration enforcement and detention center funding, exorbitant fees and new caps on certain work-based visas, new travel bans for various countries, the end of Temporary Protected Status (TPS) for many groups of immigrants, a new public charge rule, restricted student visas, and numerous other actions that are still being litigated in the courts. President Trump’s actions to reduce immigration resulted in net international migration dropping from 2.7 million in July 2024 to 1.3 million in June 2025.

Labor market impact of declining net international migration

Employment Immigration is the driving force behind America’s labor supply growth, accounting for about half of labor force growth each year for the past three decades and an even larger share in recent years. The U.S. population is aging, with deaths expected to exceed births by 2030. In an economy with low birth rates, immigration is an integral component of America’s labor supply. If reductions to immigration continue on this aggressive path, negative job growth could become the new normal according to some estimates.

The labor force participation rate for native-born workers fell in the fall of 2025 and remains lower than the forecasted LFPR.

While President Trump claims that his enforcement actions will bring on positive employment outcomes for native-born workers, the data beg to differ. Indeed, the latest data show that native-born employment indicators continue to stagnate or materialize worse than forecasted trends. Indicators such as the employment-to-population ratio (EPOP) and labor force participation rate (LFPR) for native-born workers demonstrate that the Trump administration’s policies do not seem to be pulling these workers off the sidelines as promised. In fact, the LFPR for native-born workers fell in the fall of 2025 and remains lower than the forecasted LFPR, with today’s latest data showing the LFPR for native-born workers fell to 61 percent. Meanwhile, the native-born unemployment rate remains elevated in February 2026 at 4.7 percent, compared with 4.4 percent at this time last year. By using three-month moving averages to address unadjusted data, this analysis finds that native-born workers’ labor market outcomes still look worse compared with pre-pandemic levels or what would have been expected had trends from 2023 to 2024 continued. (see Figure 1)

Some of this weak growth in the labor force participation rate can be attributed to shifting demographic trends in the labor market as the aging population exits the labor force and current immigration policies fail to fill the gap. A recent analysis by the Federal Reserve Bank of Atlanta found that recent migrants—those who’ve been in the United States for fewer than five years—are primarily responsible for the growth in foreign-born LFPR, underscoring the importance of new net migration for the strength of the labor force.

FIGURE 1

Data reflect three-month moving averages of not seasonally adjusted (NSA) data. Source: U.S. Bureau of Labor Statistics, “Labor Force Participation Rate - Native born” (last accessed March 2026) U.S. Bureau of Labor Statistics, “Labor Force Participation Rate - Foreign born” (last accessed March 2026).Chart: Center for American Progress

Wages


In the latest literature analyzing recent enforcement actions, the authors of a National Bureau of Economic Research working paper found small positive short-run effects on native-born wages following the large-scale removal of immigrant workers from the economy but those short-term effects are reversed in every state in the long run, resulting in wage declines that are more than twice as large as any short-term gains. At the same time, the study found that the large increase in deportations sought by the Trump administration—modeling the removal of 50 percent of the undocumented population—would result in prices rising by 1 percent in the agricultural sector.


Most recent studies focus on modeling the effects of increased immigration enforcement. However, the Trump administration’s policies are also reducing the availability of many legal pathways and altering existing policies, thereby changing the status of previously documented immigrants. The Cato Institute estimates that Trump’s policies slashing humanitarian parole and TPS created roughly 2.5 million new undocumented immigrants in 2025. Furthermore, the same report estimates that by creating an indefinite refugee ban, the Trump administration effectively reduced permanent legal immigration by 10 percent. Most economic literature focuses on the marginal effect of a given policy change, yet these changes are unprecedented in scale and inherently change the baseline level of the undocumented population.


A new study released by North Star Policy Action shows the broader wage effects of immigration enforcement in the Minneapolis-Saint Paul metro area, which has seen a surge in U.S. Department of Homeland Security enforcement actions in recent months. This study builds on an earlier impact evaluation conducted by the city during the first month of enforcement operations, which estimated January’s lost wages to be $47 million. However, North Star Policy Action’s new estimate of the macroeconomic effects is substantially higher, at $106 million in lost wages in just a few weeks between January and mid-February. The broader macroeconomic impact of these policies—including lost business revenue, increased rent assistance needs, and heightened food insecurity—cost the city at least $203 million in January alone, according to an analysis by the city of Minneapolis.


Conclusion


It will take years, not months, to see the full effect of these policies on the U.S. economy, but the immediate negative impacts are already apparent and will only balloon with time. Today’s report incorporated the effects of immigration that economists knew would shape the aggregate economy. While there are many factors that contributed to the negative employment growth in two of the past three months and slight uptick in the unemployment rate, reduced immigration is certainly part of that story—and the household data now better approximate that reality.


The authors would like to thank Debu Gandhi, Silva Mathema, Lily Roberts, Jared Bernstein, and Mona Alsaidi for their thoughtful review. Anh Nguyen and Steve Bonitatibus provided art and editorial support.


Sara Estep is a CAP Economist.

Kennedy Andara is Policy Analyst, Economic Policy.