Slowing U.S. Population Growth Could Trim $100 Billion From GDP in 2026, Analysis Warns

A sharp slowdown in U.S. population growth could shave more than $100 billion off the nation’s economic output next year, according to a new analysis that underscores the growing link between demographic trends and long-term economic strength.

Economic forecasting firm Implan estimates that weaker population gains in 2025 will translate into a $104 billion reduction in gross domestic product in 2026, compared with a scenario in which growth had continued at its earlier pace.

While the U.S. economy remains resilient — expanding at a 4.3% annualized rate in the third quarter of 2025 — economists warn that demographic shifts could gradually weigh on consumer spending, job creation and fiscal stability.

“Population growth isn’t just a demographic statistic — it’s a driver of economic activity,” said Nadège Ngomsi, an economist at Implan. “When growth slows sharply, spending slows, job creation slows, and those effects ripple across local economies.”

A Widening “Growth Gap”

U.S. population growth has been decelerating for decades, largely due to persistently low birth rates. But immigration patterns have amplified the slowdown in recent years.

According to Census data, immigration dropped significantly during the first year of the Trump administration, pushing overall population growth to its lowest level since the start of the COVID-19 pandemic.

In 2025, the number of new U.S. residents totaled 1.8 million — down sharply from 3.2 million the previous year. That 1.4 million-person “growth gap,” as described by Implan, represents workers, consumers and taxpayers who did not enter the economy.

Implan estimates those missing residents would have generated approximately $86 billion in household spending and supported more than 741,000 jobs.

The impact extends beyond a single year. Slower population expansion can compound over time, affecting labor supply, business investment decisions and government finances.

Long-Term Consequences for the Labor Market

A slower-growing population means fewer workers entering the labor force — a dynamic that could reshape industries already grappling with labor shortages.

The report suggests that without stronger population gains, policymakers and businesses may need to prioritize productivity improvements and higher labor force participation rates to offset the demographic drag.

The issue could also have implications for Social Security and other entitlement programs, which rely on a steady base of working-age taxpayers to support retirees. With an aging population and fewer new entrants to the workforce, funding pressures may intensify in the coming decades.

Despite those concerns, the projected $104 billion GDP reduction represents a relatively small share of the nation’s roughly $31 trillion economy. Economic momentum has recently been stronger than average, with growth outpacing the typical 2% to 3% range.

Still, analysts caution that demographic shifts often unfold gradually but exert lasting structural effects.

Housing Market Effects: Relief or Restraint?

Some sectors are likely to feel the effects sooner than others.

Industries dependent on new household formation — including housing, construction and health care — are expected to face immediate headwinds.

“If growth slows down, then you see fewer households and less demand for housing,” Ngomsi said.

That dynamic could help cool home prices, which surged in the years following the pandemic. A slower pace of new household formation may ease upward pressure on housing costs, potentially improving affordability for buyers who have struggled with high prices and elevated mortgage rates.

However, experts note that demographic trends are only one piece of the housing puzzle. The post-pandemic price surge has largely been attributed to years of underbuilding and strong demand from domestic buyers, rather than immigration alone.

Debate over immigration’s role in housing costs has intensified in political circles. Some policymakers argue that deportations and tighter border controls could reduce demand and lower prices. Housing economists, however, generally point to supply shortages as the primary driver of elevated home values.

Even if population growth moderates housing demand, high borrowing costs may continue to limit affordability.

A Call for Productivity Gains

The broader economic challenge posed by slower population growth may ultimately hinge on productivity.

With fewer workers entering the economy, sustaining robust GDP growth will depend increasingly on technological innovation, workforce training and policies that encourage greater labor force participation — particularly among older Americans and underrepresented groups.

Implan’s analysis emphasizes that demographic trends are not destiny, but they do require strategic adjustment.

“I do truly believe there is a way out of this,” Ngomsi said, suggesting that targeted policy reforms and investment in human capital could offset the drag from slower growth.

For now, the findings serve as a reminder that the strength of the U.S. economy is closely tied not only to interest rates and consumer confidence, but also to the size — and growth — of its population.