Oakland (Special to ZennieReport.com) – President Trump’s clearly on a war against immigration into America, but it has been based on an argument that’s by turns racist and classist. The Trump Administration claims it’s trying to stop “the worst” from entering the United States, and how he defines that is by skin color and nationality, with Mexicans and Latinos in general being the focus. Now comes data from the Dallas Federal Reserve Bank showing that Trump’s immigration plan is actually hurting American economic growth.
In July 8th of this year, 2025, The Dallas Federal Reserve Bank issued a study called “Declining immigration weighs on GDP growth, with little impact on inflation”.Written and researched by Pia Orrenius, Grace Ozor, Madeline Zavodny and Xiaoqing Zhou, the scientific paper reported the following:
Unauthorized immigration surged sharply in 2021–24 but has since declined abruptly with negative implications for economic growth. Estimates based on historical data and a structural vector autoregression model suggest gross domestic product growth in 2025 is 0.75 to 1 percentage points lower than in a benchmark simulation using the Congressional Budget Office’s immigration projections through November 2024.
The Dallas Federal Reserve study’s estimates show that an unexpected increase in net unauthorized immigration raises U.S. output growth for about two years but has almost no effect on inflation. “Applying these estimates to our baseline policy scenario, which assumes that net unauthorized immigration remains at its spring 2025 level, annual GDP growth is about 0.8 percentage point lower than it would have been if net unauthorized immigration would have evolved as in the CBO’s latest demographic projection.” the Dallas Federal Reserve authors report.
The Dallas Fed’s study explains:
TheU.S. experienced an unprecedented immigrationsurge from 2021 to 2024, driven mainly by an influx of immigrants crossing the Southwest border without visas. Many were released into the country after encountering the Border Patrol.
These immigrants were issued humanitarian parole, allowed to enter the U.S. to seek asylum or given notice to appear in immigration court. Others entered the country illegally without encountering enforcement personnel. The Congressional Budget Office (CBO)projected that 7.3 million“other foreign nationals,” unauthorized immigrants or immigrants with some form of quasi-legal status, but not valid visas, were added to the U.S. population on net during 2021–24. This dwarfed the prepandemic annual average of about 100,000.[1]
Although the postpandemic immigration surge slowed by mid-2024, policies the new administration implemented this year have already led to further reductions in this type of immigration in terms of both less inflow and higher outflow (the latter reflecting more deportations).
The slowdown in unauthorized immigrant inflows will have important implications for growth of the labor force and economy and may impact wages and prices. Increases in the foreign-born population accounted formost labor force and population growthin recent years. Unlike previous influxes of unauthorized immigrants, during the latest instance manypostpandemic arrivals were granted temporary protections,allowed to enter the country and issued work permits.
To discover and measure the potential impact on the U.S. economy of reduced unauthorized immigration, The Dallas Fed uses a structural vector autoregressive (VAR) model of the relationship between net inflows of unauthorized immigrants and key macroeconomic variables such as gross domestic product (GDP) and inflation using data beginning in the 1950s.
The Dallas Fed then took the analysis a step further by mapping different immigration policy scenarios into future immigration shocks with macroeconomic effects that can be quantified within the structural VAR model. This methodology allows The Dallas Fed to consider several scenarios for the future evolution of unauthorized immigration, including a mass-deportation scenario in which the number of people removed from the country annually rises to 1 million by year-end 2027.
The Dallas Fed explains:
“Our estimates show that an unexpected increase in net unauthorized immigration raises U.S. output growth for about two years but has almost no effect on inflation. Applying these estimates to our baseline policy scenario, which assumes that net unauthorized immigration remains at its spring 2025 level, annual GDP growth is about 0.8 percentage point lower than it would have been if net unauthorized immigration would have evolved as in theCBO’s latest demographic projection.The CBO estimates reflect the laws and policies in place in November 2024 and, hence, do not incorporate immigration policy changes after January 2025.”
The Dallas Fed’s extensive economic study ends with this simple conclusion: “Our analysis raises the concern that a sharp tightening of immigration policies has the potential to substantially reduce output growth.” That view runs counter to the stated ideas of Trump Administration policy-makers.
Explaining The 4.3 Percent Rise In 3rd Quarter GDP In The Context Of Dallas Fed Report
The Bureau of Economic Analysis recently reported that GDP increased 4.3 percent, writing:
Real gross domestic product (GDP) increased at an annual rate of 4.3 percent in the third quarter of 2025 (July, August, and September), according to the initial estimate released by the U.S. Bureau of Economic Analysis. In the second quarter, real GDP increased 3.8 percent. The increase in real GDP in the third quarter reflected increases in consumer spending, exports, and government spending that were partly offset by a decrease in investment. Imports, which are a subtraction in the calculation of GDP, decreased.
That GDP estimate was not reported nor referred to by The Dallas Federal Reserve, which reported the following:
The Weekly Economic Index (WEI) provides a signal of the state of the U.S. economy based on data available at a daily or weekly frequency. It represents the common component of 10 different daily and weekly series covering consumer behavior, the labor market and production. It is updated Thursday at or shortly after 10:30 a.m. CT, using data available up to 8 a.m. CT. December 24, 2025: Update
- The WEI is currently 2.32 percent, scaled to four-quarter GDP growth, for the week ended Dec. 20 and 2.31 percent for Dec. 13. The 13-week moving average is 2.26 percent. This is compared with 2.33 percent four-quarter GDP growth through third quarter 2025. Railroad traffic, electricity output and fuel sales were not released for the week ended Dec. 20 due to the Christmas Day holiday.
In other words, The Dallas Fed quietly reported GDP growth at 2.33 percent, and did not mention or try and replicate what President Trump’s newly-restaffed BEA (done after President Trump hated the original staff’s “stick to the facts and numbers” approach rather than cook up estimates that made him look good, and so fired them in a fit of pique) reported.
Indeed, The Dallas Fed researchers present a completely detailed rebuke to the BEA reports without even mentioning them. Consider this from October 8th of 2025: “A new, high-frequency estimate of break-even employment shows a dramatic reversal in immigration flows, combined with cyclical shifts in labor force participation, has caused the monthly break-even requirement to collapse from a peak of approximately 250,000 in 2023 to about 30,000 in mid-2025.” In other words, breakeven employment declined after Trump Immigration Policy took effect.
Stay tuned.