Weekly Market Summary

Extra Credit^*

• The post-pandemic surge in illegal immigration to the U.S. has come to a screeching halt, with new entries plummeting to nearly zero in February 2025. This sharp decline in immigration flows, coupled with increased deportations, could challenge sectors reliant on irregular immigrant labor and will likely create significant labor challenges for sectors such as construction and agriculture.
• Recent data provided by Bloomberg Barclays identify sectors with high exposure to a shortage of immigrants, which could lead to higher labor costs and increased inflationary pressures. They are crop production, private households, agriculture and forestry, and construction.
• On the flip side, the lowest impacted sectors are warehousing and storage, textile product mills, and food manufacturing.
• Bank-loan and high-yield bond default rates, excluding distressed exchanges, finished February at 1.26% for high-yield bonds and 0.27% for bank loans, down from 1.50% and 0.30% in January. This is also well below the long-term historical default rate of 3% for loans and 3.4% for high yield, and the historical post-GFC default rates of 2.3% and 2.5%, respectively.

Sources: Bloomberg and JP Morgan as of 3/24/25.