Immigration Rebound Helps Solve US Inflation Puzzle: Goldman Sachs
Portfolio Pulse from Piero Cingari
Goldman Sachs reports that the recent surge in U.S. immigration has helped stabilize wages and inflation, avoiding an overheated economy. This rebound in immigration levels, surpassing pre-Covid-19 trends by 1.8 million, has filled labor gaps, especially in low-wage sectors like leisure and hospitality, mitigating extreme wage and price pressures. The report highlights that immigration impacts wage growth and inflation modestly, with potential future declines in immigration not posing significant risks to economic forecasts. Shares of Fiverr International Inc. (FVRR) and Upwork Inc. (UPWK) rallied during the pandemic due to labor market tightness.
May 07, 2024 | 5:47 pm
News sentiment analysis
Sort by:
Descending
NEUTRAL IMPACT
Fiverr International Inc. shares rallied during the pandemic as immigration levels impacted labor market tightness, potentially influencing its business model.
Fiverr's business model, centered around freelance services, likely benefited from the labor market tightness during the pandemic. However, with immigration stabilizing the labor market, the short-term impact on FVRR's stock might be neutral as the market adjusts to these changes.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 70
NEUTRAL IMPACT
Upwork Inc. experienced a significant rally in its shares during periods of labor market tightness exacerbated by the pandemic, which immigration levels have now helped stabilize.
Similar to Fiverr, Upwork's platform for freelance and remote work opportunities likely saw increased demand during labor shortages. With the labor market returning to balance thanks to immigration, the immediate impact on UPWK's stock is seen as neutral, reflecting the broader labor market stabilization.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 70