Important security note: Warning of attempted fraud in the name of DWS
We have detected that fraudulent individuals are misusing the "DWS" trademark and the names of DWS employees on the internet and social media. These fraudsters are operating fake websites, Facebook pages, WhatsApp groups and Mobile Apps. Please be aware that DWS does not have any Facebook Ambassador profiles or WhatsApp chats. If you receive any unexpected calls, messages, or emails claiming to be from DWS, exercise caution and do not make any payments or disclose personal information. We encourage you to report any suspicious activity to info@dws.com, including any relevant documents and the original fraudulent email. Additionally, if you believe you have been a victim of fraud, please notify your local authorities and take steps to protect yourself.
Why U.S. growth is likely to slow
15/08/2025
At least in terms of its demographic outlook, the U.S. is already well on its way to becoming far less exceptional than it was just a few years ago.
In the long run, economic growth is a surprisingly boring affair. In principle, it boils down to three simple questions: How many workers are there? How much capital equipment do they have to work with? And how efficiently are workers and capital being used to produce goods and services for which there are willing buyers?
Understandably, investors devote a lot of attention to how growth or inflation might fluctuate in the months and quarters ahead, as well as how central banks and other policymakers might react. Meanwhile, how well an economy can turn inputs into output depends on plenty of things that are hard to anticipate, from available technologies to government policies. For example, trying to gauge the likely longer-term impact of recent U.S. tariff measures involves a lot of guesswork. But arguably, that makes it even more important to keep an eye on drivers of economic growth that can already be anticipated, rather than merely focusing on whatever happens to have grabbed the imagination of Wall Street’s chattering classes.
Our Chart of the Week looks at a topic that appears to us to have been particularly neglected in the shadows of tariff disputes and inflation fears. It shows how employment of foreign-born workers has recently softened, even as various policies of the Trump administration have only just started to come into effect. Beyond short-term effects on growth, consumption and wages, this matters because immigrants accounted for nearly 75% of the growth in the prime-age (25–54) civilian labor force between 2000 and 2022. Immigrants also tend to start businesses at higher rates than native-born Americans and appear to have made an oversized impact on innovation, from filing patents to inventing new business models.[1] As for the longer-term prospects for future native workers, birth rates have also fallen sharply over the past two decades, particularly in states where they used to be comparatively high by rich-country standards as recently as 10 years ago.[2]
Over the past 10 years, most U.S. employment growth was accounted for by foreign-born workers
Sources: Bureau of Labor Statistics, DWS Investment GmbH as of 8/12/25
* Not seasonally adjusted
“At least in terms of its demographic outlook, the U.S. is already well on its way to becoming far less exceptional than it was just a few years ago,” argues Christian Scherrmann, Chief U.S. Economist at DWS. “Based on international experiences, this has two big implications. First, supportive policies — such as increasing female participation by improving child-care provision — can help, but that takes a long time. Second, migration crackdowns not only limit the size of the working-age population, but also make it volatile and harder to estimate. That, in turn, introduces volatility into all sorts of other measures.”
This is one of the reasons why we have long argued that it often makes sense to put more weight on per capita and other population-invariant measures, especially when making international economic comparisons.[3] But try explaining that to the many investors who have come to see higher headline U.S. economic growth rates as a key attraction compared to, say, Europe.