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The US Census Bureau's most recent population estimates show
that the rate of US population growth continues to slow. In 2019,
the "natural increase" in the population, the number of births
minus the number of deaths, totaled less than 1 million for the
first time in at least four decades. At the same time, immigration
to the US has continued to slow due to heightened enforcement of
related laws and a reduction in allowances for legal immigration.
In addition, the Census report included an updated estimate for
immigration between 2017 and 2018, which came in 277,000 below the
initial estimate. That downward adjustment carried over into a
lower estimate of immigration for 2019, as well. The slowdown in
immigration is most evident in California, Florida, New York, and
Texas; those four states combined account for nearly half of net
migration into the United States each year.
Ten states experienced population losses from mid-2018 to
mid-2019, while four states in the Rocky Mountain region posted
growth rates above 1.6%. Four states had more deaths than births,
resulting in a negative natural increase. Two states (Nevada and
West Virginia), experienced negative net international migration,
which is rare.
The four big "winners"—Arizona, Idaho, Nevada, and
Utah—all experienced very solid natural increases, along with
high levels of net domestic in-migration. Arizona and Utah also
experienced an influx of international migrants, while Idaho posted
a modest increase and Nevada saw the aforementioned decrease in
that category. All four states feature relatively low costs of
living and are attracting residents from nearby California, which
had the highest net out-migration of any state.
In the next tier of higher-growth states, including Texas,
Florida, South Carolina, Colorado, and Washington, we see the
continuation of a long-term trend of states in the South and West
experiencing higher population growth. All of the states in this
category are experiencing high rates of both domestic and
international in-migration, with generally high rates of natural
increase. Most also qualify as low-cost states.
The cost differential among states, especially in terms of tax
rates, has been made even more critical by the change in the
federal tax treatment of state and local taxes (SALT) implemented
at the end of 2017. The cap on SALT deductions imposes an added
cost on residents of states with relatively high taxes, most
notably California, New York, and New Jersey.
The number of states posting annual population declines has
risen over the past decade, from just one in 2010 to ten in 2019.
Broadly speaking, these states follow the pattern of states in the
northeast losing population due to a combination of relatively
older population and higher costs of living. Louisiana and
Mississippi do not fit the geographic pattern, but feature low
rates of employment growth and relatively high rates of poverty.
The slowdown in immigration is holding down population growth in
these states, along with high rates of domestic out-migration.
West Virginia experienced the greatest population loss in
relative terms in 2019, with a decrease of 0.7%. The state
registered a rare trifecta of negative natural increase, negative
international migration, and negative net domestic migration. The
state's economy has struggled to fill the void created by the
decline of the coal mining industry, and a relatively older
population makes it difficult for births to keep pace with deaths.
On top of those structural issues, the state has been among the
hardest hit by the epidemic of addiction to opioids and related
drugs, which has caused a spike in deaths in the working-age
population. The state's population losses among the younger age
cohorts due to premature deaths and out-migration will only
exacerbate the shortfall in births over the next several years.
The new state-level population data are in line with trends
established over the past few years, but with a more pronounced
deceleration in immigration growth. This slowdown is expected to
continue, barring a change in the Trump administration's approach
to immigration. States in the southern and western regions continue
to see more rapid population growth than the north and east. The
states with higher population growth tend to have higher economic
growth, as having more people translates into higher demand for
services as well as a larger labor force for employers. Population
growth also stimulates demand for new housing, providing an added
economic boost.
Looking at the broader picture, a trend of weaker population
growth overall and a decline in natural population increase has
negative implications for economic growth at both the national and
state levels, as both aggregate supply and demand are partly a
function of population. Federal and state tax revenues
and spending levels will be affected by the total number of people
and the age distribution of the population, with budget obligations
for pensions, medical care, and other social services becoming more
difficult to fund as the relative age of the population increases.
Our regional forecasts are updated regularly to reflect changes in
demographic conditions.
It should be noted that these Census estimates are taken from
the annual American Community Survey, which is a less extensive
survey effort than the decennial Census, which will take place this
year. The response rate for the ACS has slipped recently, leading
to concern that population is being underestimated. For now,
though, the estimates represent the best information available to
gauge population growth.
Posted 08 January 2020 by Tom Jackson, Principal Economist - US Regional Economic Service