Donald Trump’s new immigration policies—including deporting, the White House claims, about 750 immigrants a day on average—are helping drive up prices, Moody’s chief economist Mark Zandi told Fortune.
He says if Trump continues deporting immigrants at the current rate, inflation will go from 2.5% to somewhere close to 4% “by the time it hits its peak early next year.”
Zandi says his stark prediction is based on recent inflation data. “Foreign-born labor force is declining, and the overall labor force has gone flat since the beginning of the year,” he added. “That’s causing tightening in a lot of markets, adding to costs and inflation.”
The Labor Department reported Thursday that the producer price index (PPI)—a measure of wholesale inflation before it hits consumers—rose 0.9% from June to July, the biggest jump since 2021. Compared with a year earlier, wholesale prices were up 3.3%.
A jump in the cost of services—about 1.1%—accounted for more than three-quarters of the increase in the PPI. This follows data earlier in the week showing the core consumer price index ticked up 0.2%.
