The U.S. working-age population is approaching a precipice, one that has grown significantly steeper in the past year, in part because of the Trump administration’s stringent immigration policies.
The share of American adults who are employed or actively seeking work was destined to decrease over the next decade. However, falling birth rates and the White House’s immigration crackdown are poised to create an even larger deficit in America’s future workforce—amounting to a gap of more than 2 million people.
Over the next 10 years, the U.S. population is projected to grow at an average annual rate of 0.3%, according to a from the Congressional Budget Office (CBO) released on Wednesday. This is half the growth rate the nonpartisan agency reported last year and translates to a downward adjustment of 2.4 million fewer working-age Americans by 2035. A smaller workforce could have a substantial impact on U.S. productivity in the coming years—though the Trump administration believes emerging technologies may help soften the impact.
The CBO report noted that increased business adoption of artificial intelligence could help keep productivity stable over the next decade. By 2036, U.S. economic output will be 1% higher than it would have been without AI assistance, a boost potentially worth hundreds of billions of dollars, the report stated.
The report described AI’s impact as an “offsetting factor” as the economy faces a slowdown in labor force growth. It also highlighted that the shift toward an AI-driven economy already accounts for a significant portion of private-sector spending. Business investment this year is projected to rise by 3.9%, largely fueled by the construction of data centers and the acquisition of high-end computers and intellectual property needed to scale AI deployment. Major U.S. tech firms and so-called “hyperscalers” have already committed to developing AI infrastructure this year. This surge in investment is likely to help the U.S. sustain productivity even as the number of available workers declines, according to the CBO.
The Trump administration has framed AI’s impact as a potential driver of GDP growth, with the White House’s Council of Economic Advisors noting last month that AI-related investments contributed 1.3% to GDP growth last year, drawing parallels to the impact of railroad investments during the Industrial Revolution.
Yet, the benefits of AI filling human job gaps and driving economic growth have limits. For instance, AI does not pay taxes, and a smaller population means a smaller tax base. The CBO predicts that reduced net immigration due to the Trump administration’s policies will result in 5.3 million fewer people living in the U.S. a decade from now. Dwindling tax revenues will also strain the government budget, with immigration actions taken during Trump’s first year back in office adding an extra half a trillion dollars to the federal deficit by 2035.
A decade from now, the absence of human workers will be noticeable. In a released last month, the Brookings Institution noted that “nearly all growth in the labor force has stemmed from immigration flows” in recent years, and reduced immigration in 2026 will likely lead to negative job creation and slower economic growth. A drop in both illegal and legal immigration could result in up to 15.7 million fewer workers by 2035, according to an October report by the National Foundation for American Policy, a public policy research group. The study found that annual economic growth will also decline by nearly one-third due to smaller workforces.
With many businesses still about integrating AI, it remains unclear whether the technology will boost productivity enough to compensate for reduced human capital. The CBO report listed growth from AI advancements as one of the key uncertainties in its forecast, but with immigration restricted and the U.S. native-born labor force expected to , much hinges on AI delivering productivity gains quickly.