A report from the Latino GDP Project highlights newly released and record-setting population and labor force data. For the first time in history, one of every five people living in the United States is Latino. In 2024, the Latino labor force grew 5.5 percent, the single strongest growth on record and 4.2 percentage points stronger than Non-Latino. And the Latino labor force participation rate sits at an all-time high of 69 percent. The Latino labor force participation premium, that is the difference between Latino and Non-Latino participation rates, hit a record of 6.2 percentage points in 2024.

“Time and time again, we find that hard work, self-sufficiency, optimism and perseverance are the characteristics that underly the strength and resilience of U.S. Latinos,” said Matthew Fienup, executive director of the Center for Economic Research & Forecasting at Cal Lutheran. “By supporting this population, we believe these same characteristics will continue to drive growth in the overall U.S. economy for years to come.”

The Latino GDP Project, an ambitious multi-disciplinary research initiative of Cal Lutheran and UCLA, provides careful, explicit, and timely documentation of the economic powerhouse represented by U.S. Latinos.

Watch the Telemundo feature HERE

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California Lutheran University economists Matthew Fienup and Dan Hamilton have been named as recipients of a 2024 Crystal Ball Award for the Fannie Mae Home Price Expectations Survey (formerly the the Zillow Home Price Expectations Survey and the Case-Shiller Home Price Expectations Survey). Fienup and Hamilton, both of Cal Lutheran’s Center for Economic Research & Forecasting (CERF), are receiving the prestigious national forecasting award for the fourth time in six years, after winning three straight awards in 2019, 2020, and 2021.

The CERF team received this year’s honor for their outstanding accuracy. CERF’s 2-year-ahead forecast of 2024 home prices was the single most accurate among more than 100 forecasters in the survey. CERF’s 3-year-ahead forecast was the number 3 most accurate, and their 1-year-ahead forecast was number 5. Other top finishers include forecasting heavyweights Mark Zandi of Moody’s Analytics, Denis Egin of the International Monetary Fund, Susan Wachter of the Wharton School, and Carlos Garriga of the Federal Reserve Bank of St. Louis.

“CERF has been proud to be a part of the Fannie Mae Home Price Expectations survey since it was launched by Nobel Prize winner Robert Shiller in 2010,” Hamilton said. “The survey leverages a large community of professional forecasters to provide forward guidance on home prices, which in turn impact household spending, household and investor psychology, and financial markets.” Originally started by Yale Professor and Nobel Laureate Robert Shiller, the organization Pulsenomics surveys a distinguished panel of over 100 economists, investment strategists, and housing market analysts each quarter regarding their 5-year expectations for future home prices in the United States.

The Center for Economic Research & Forecasting was founded by economists Bill Watkins and Dan Hamilton in 2009. Hamilton, CERF’s Director of Economics, has worked with economic forecasting models for nearly 25 years. Fienup arrived at CERF in 2014 and took over as Executive Director upon Watkins’ retirement in 2016. Fienup specializes in applied econometrics and economic policy analysis. CERF provides national, state and regional economic forecasts and analysis, used by government, private business and non-profit organizations. CERF is a member of the Wall Street Journal Economic Forecasting Survey and the National Association of Business Economics’ Economic Outlook and Economic Policy Surveys. CERF economists are regularly quoted by business journals and major media, including the Wall Street Journal, the Associated Press, the Washington Post, the Financial Times, the Economist Magazine, Forbes, Bloomberg, and CNBC.

“At CERF, our goal is to provide objective, clear-eyed forecasts that reflect what economic theory and state of the art forecasting tools reveal. We see our role as one of calling balls and strikes, rather than advocating for a preferred outcome. Our fourth Crystal Ball award is validation of that approach. It further demonstrates CERF’s outstanding track record of accuracy,” Fienup said. “We are especially proud of this award given the history of the survey and the distinguished list of survey contributors.”

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The Inaugural U.S. Latina GDP Report builds directly upon six annual U.S. Latino GDP Reports released since 2018 as well as eight State and a dozen Metro Latino GDP Reports written in partnership with Bank of America. Those reports provide a factual view of the large and rapidly growing economic contribution of Latinos living in the U.S. and document substantial economic growth premiums enjoyed relative to Non-Latinos. These premiums exist across a wide range of economic indicators, and Latino economic premiums are large – for example, U.S. Latino labor force growth is 9 times faster than Non-Latino labor force growth. U.S. Latino GDP growth is 2.4 times faster than Non-Latino GDP growth.

Analysis of U.S. Latinas reveals that, in almost every case, the economic growth premium enjoyed by Hispanics females is even larger than the already impressive premium for all Hispanics. It is not enough then to say that U.S. Latinas are drivers of economic growth and a critical source of resilience for the broader economy. They are drivers of economic vitality. U.S. Latinas are giving life to the U.S. economy, dando vida a la economía.

Dando Vida a la Economía | the Latina GDP

The 2021 U.S. Latina GDP is $1.3 trillion, up from $661 billion in 2010. The total economic output of Hispanic females in 2021 is larger than the entire economy of the state of Florida. In fact, only the GDPs of California, Texas and New York are larger than the U.S. Latina GDP.

As with the broader Hispanic economy, while impressive for its size, the Latina GDP is truly remarkable for its rapid growth. From 2010 to 2021, the economic contribution of Latinas grew a total of 51.1 percent. Over this entire period, the real GDP of Hispanic females grew 1.2 times the rate of Hispanic males’ GDP and an astonishing 2.7 times the rate of Non-Hispanic GDP.

Educational Attainment

Dramatic growth of Latina GDP is driven by rapid gains in human capital. Educational attainment grew rapidly for Latinos of all genders from 2010 to 2021. During those years, the number of Hispanic females with a bachelor’s degree grew a total of 103.0 percent, while the number of highly educated Non-Hispanic females grew just 38.3 percent. In other words, over the entire period that we examine, Latina educational attainment grew 2.7 times that of Non-Hispanic females in the U.S.

Labor Force Participation

Rapid growth of educational attainment is accompanied by strong labor force participation. The Latina labor force participation rate has grown steadily from 2000 to the present, adding 7.5 percentage points over two decades. During this same period, the labor force participation rate of Non-Hispanic females was essentially flat. The Latina labor force participation premium, relative to Non-Hispanic females, has grown steadily since 2010 and currently sits at an all-time high of 2.5 percentage points. Latinas, who started the century with a labor force participation rate a full 5.0 percentage points lower than Non-Hispanic females are now 2.5 percentage points more likely to be actively working than their Non-Hispanic female counterparts.

Income

Rapid gains in real income naturally flow from Latinas’ strong gains in human capital. While all Latino incomes grew strongly from 2010 to 2021, Hispanic females saw even stronger gains than Hispanic males. Compared to Non-Hispanic females, this income growth is especially noteworthy. From 2010 to 2021, the real incomes of Hispanic females grew a total of 46.0 percent compared to only 18.5 percent for Non-Hispanic females. In other words, Latinas enjoy an income growth rate that is 2.5 times that of their Non-Hispanic female counterparts.

COVID-19 Pandemic and the Latina GDP

According to the dominant narrative, Latinos as a demographic cohort should have been knocked down by the COVID-19 pandemic. Yet, examining the impacts of COVID-19 through the lens of the Latino GDP reveals a very different narrative.

From the pre-pandemic peak of economic activity to 2021, real U.S. Latina GDP grew a total of 7.7 percent. This eclipses the 1.5 percent growth of Non-Hispanic GDP over the same period.

The strength of Latina GDP growth during the pandemic is consistent with the extraordinary growth of Latina incomes. Over the first two years of the COVID-19 pandemic, the real wage and salary income of U.S. Latinas increased a total of 9.3 percent, while Non-Hispanic income declined by a total of 1.7 percent. The extraordinary efforts of Latinas during the darkest days of the COVID-19 pandemic and throughout the economic recovery that followed gave life to the U.S. economy, at a time of desperate need.

Given the remarkable growth of the U.S. Latina GDP and other important trends outlined in this report, we expect that Latinas will continue to enjoy substantial growth premiums and provide greater vitality, giving life to the economy, dando vida a la economía, for the foreseeable future.

To access the full U.S. Latino GDP Report, please visit www.LatinaGDP.us

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The 2022 LDC U.S. Latino GDP Report seeks to provide a factual view of the large and rapidly growing economic contribution of Latinos living in the United States. We estimate the U.S. Latino GDP based on a detailed, bottom-up construction which leverages publicly available data from major U.S. agencies. The most recent year for which the core data is available is 2020. Thus, this year’s report provides a snapshot of the total economic contribution of U.S. Latinos in that year.

As a summary statistic for the economic performance of Latinos, the 2020 U.S. Latino GDP is extraordinary. The total economic output (or GDP) of Latinos in the United States was $2.8 trillion in 2020, up from $2.1 trillion in 2015, and $1.7 trillion in 2010. If Latinos living in the United States were an independent country, the U.S. Latino GDP would be the fifth largest GDP in the world, larger even than the GDPs of the United Kingdom, India or France.

While impressive for its size, the U.S. Latino GDP is most noteworthy for its rapid growth. From 2010 to 2020, the U.S. Latino GDP was the third fastest growing among the 10 largest GDPs, while the broader U.S. economy ranked fifth. Over that entire period, the growth of U.S. Latino GDP was 2.6 times that of Non-Latino GDP

According to the dominant narrative, Latinos as a demographic cohort should have been knocked down by the COVID-19 Pandemic. Examining the impacts of COVID-19 on Latinos through the lens of the Latino GDP reveals a very different story.In 2020, in the face of the pandemic, the strength of the U.S. Latinos was sufficient for the U.S. Latino GDP to jump three spots, beginning the pandemic as the eighth largest GDP and finishing 2020 as the fifth largest.

The performance of Latinos during the pandemic is exemplified by income data. From 2010 to 2020, Latinos enjoyed significantly higher wage and salary income growth than Non-Latinos. During those years, Latino real income grew an average of 4.3 percent per year compared to only 2.1 percent for Non-Latinos. 2020 was exceptional. Despite the extraordinary challenges presented by the pandemic, Latino real wage and salary income surged 6.7 percent. Meanwhile, Non-Latino income shrank by 1.1 percent.

Latino incomes surged due to Latinos’ tremendous work ethic during the pandemic. In 2019, prior to the onset of COVID-19, Latino labor force participation (LFP) was a record 6.1 percentage points higher than Non-Latino. By April 2020, with the onset of government-mandated shutdowns, both Latino and Non-Latino LFP saw sharp declines. Yet, it was evident from the earliest months of the pandemic that Latinos would press through each subsequent wave of disease transmission and the re-imposition of lockdowns. In each case, they returned to work with urgency. In 2020, the Latino labor force participation rate premium hit a new all-time high, when U.S. Latinos were 6.5 percentage points more likely than their Non-Latino counterparts to be actively working or seeking work.

As a result of the hard work and persistence of Latinos, Latino economic performance during the pandemic year of 2020 was strong by any comparison. In 2020, Latino real GDP did contract, however the contraction was small. Real U.S. Latino GDP contracted by 0.8 percent compared to a 4.4 contraction for Non-Latino GDP. India’s GDP contracted by 7.1 percent. France’s contracted by 8.2 percent, and the United Kingdom’s contracted by an astonishing 9.8 percent. Among the largest countries on the world stage, only China experienced stronger growth than the U.S. Latino GDP.

None of this is to make light of the hardship that Latinos endured during the pandemic. Because of a historic lack of investment in health infrastructure for Latino communities, because of their strong work ethic and unique family structure, Latinos were among the groups hardest-hit by COVID-19. This occurred despite Latinos’ superior health outcomes which prevailed in the decade prior to the pandemic. Coming out of nowhere, COVID-19 very suddenly became the number one cause of death for Latinos as opposed to only the number 3 cause of death nationally. Yet, we find that the economic data published in this report honor the sacrifices made by Latinos and illustrate just how remarkable Latino strength and resilience really is. It also highlights just how much the broader U.S. economy benefited from that strength during the pandemic. Latinos were a critical source of resilience, not just for their own families and communities, but for the U.S. economy as a whole.

Download the full report HERE

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CERF and its research partners at UCLA released first-of-its-kind research which details the large and rapidly growing economic contribution of Latinos living in the Miami Metropolitan Area. The Bank of America Miami Metro Latino GDP Report was released at a live Business Summit at the historic Cardozo Hotel in South Beach.

Here are few highlights the report:

• Despite being only 45 percent of the Miami Metro Area population, Latinos are responsible for 82 of the growth of the Miami popluation and 84 percent of the growth of the Miami labor force since 2010.
• The Miami – Fort Lauderdale – West Palm Beach Metropolitan Statistical Area (MSA) is comprised of Miami-Dade, Broward, and Palm Beach counties, which are the first, second and third most populous counties in Florida.  In 2018, the Miami Metro Area was the largest metro area in Florida with 6.2 million people of all ethnicities.
• The 2018 Miami Metro Latino population is 2.8 million people, making it the third largest MSA in the nation by Latino population, ahead of the Houston Metro (with 2.6 million Latinos) and behind the New York – Newark Metro (with 4.9 million Latinos).
• The 2018 Miami Metro Latino GDP is $148.9 billion, larger than the entire economy of Washington D.C. or the state of Nebraska.
• Latinos are making strong and consistent contributions to the Miami Metro Area’s population and labor force. While the population of the Miami Metro increased steadily from 2010-18, Latino population growth was 6.8 times that of Non-Latinos. The labor force growth premium is even more impressive – from 2010-18, the number of Latino workers in Miami grew 9.3 times as quickly as Non-Latino.
• The dramatic economic contribution of Latinos in the Miami Metro Area is driven by rapid gains in human capital and a strong work ethic. From 2010-18, Latino educational attainment grew at a rate 2.4 times faster than that of Miami Metro Non-Latinos. Over those same years, Miami Metro Latinos’ labor force participation rate was an average of 4.3 percentage points higher than Non-Latinos.
• Latinos are drivers of growth and a critical source of strength and resilience for the Miami Metro Area economy.

To access the full Miami Metro Latino GDP report, please visit: 2022 Metro Latino GDP Report

Special thanks to our research sponsor, the Bank of America Charitable Foundation, and to event sponsors L’Attitude and entertainment legend Emilio Estefan.

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As discussed in detail at our annual forecast event in Thousand Oaks on March 8, CERF’s views on monetary policy have long been unconventional. We have been outspoken critics of Fed policy since 2012 and were among those that President Biden labeled un-serious last summer when the serious economists were claiming that inflation would be transitory.

CERF’s forecast of May’s inflation figure was characteristically unconventional. Our forecast for all-items CPI in May was 8.6 percent.

That is, we did not believe that the headline CPI number had peaked in March. And we believe that it still has a way to go now. Although the monthly rate of price increases likely peaked in March, we forecast that the all-items CPI will increase to a level well above 9 percent and will likely not peak until the end of the year.

What follows are thoughts about inflation that we shared last month in the Pacific Coast Business Times’ Spring Economic Forecast Issue. Last Friday’s inflation figure is welcome validation and means that our forecast is unchanged from a month ago: 

We take a strong position on the cause of the current bought of inflation. As Milton Friedman famously said, “Inflation is always and everywhere a monetary phenomenon.” Between January 2020 and January 2022, the Federal Reserve increased the size of the money supply by more than 40 percent. Minneapolis Fed President Neel Kashkari expressed the Fed’s orientation perfectly in March 2020 when he said, “There is an infinite amount of cash in the Federal Reserve.” Fed Chair Jerome Powell did his part throughout the Summer of 2020, urging Congress to put more of the Fed’s expanded money supply directly into the hands of households. The sum of the resulting relief programs was far greater than all of the foregone income that resulted from government-mandated shutdowns. Not surprisingly, the savings rate surged from around 8 percent pre-COVID to more than 30 percent. The resulting surge of consumption of consumer goods drove both congestion at U.S. ports and a surge of consumer prices not seen since the 1970s.  Because we see clear signs of classic monetary inflation, we are forced to conclude that the current bought of inflation will be persistent.

As a technical matter, we expect that the headline CPI inflation figure (which is a measured as a percent change from one year ago) will continue rising through the end of 2022, even as the monthly rate of price increases likely peaked in March. We expect the CPI measure of inflation to top 10 percent and to remain high through 2023. Readers don’t need to take our word for it. The New York Fed’s inflation expectations survey indicates that the median one year ahead expected inflation rate is 6.6 percent. The median three year ahead inflation expectation is 3.7 percent. Economic actors expect that even three years from now, inflation will still be 85 percent above the Fed’s target. Because we also believe that the Federal Reserve does not have the fortitude to endure a jarring correction in asset markets, we believe that the Fed will fail to follow through on the policy normalization that is required in order to tame inflation. As such, we believe that inflation is likely to run even higher than today’s inflation expectations indicate.

Admittedly, we have been pretty outspoken critics of Fed Policy for some time. We feel even more animated in our criticism now that the Fed finds itself so far behind the curve. The Fed only began the current tightening cycle after the nation had experienced nine months of inflation above five percent and three months above seven percent. The experience in late 2018, the last time the Fed announced an intention to normalize monetary policy, is our best prediction of what will happen in 2022. In the waning days of 2018, the Fed abruptly reversed course following a steep decline in asset prices. We don’t believe the Fed will continue tightening during the current cycle as the current market correction deepens.

Inflation is the economic issue of the moment. Real wages declined by 3 percent over the past 12 months. And even higher inflation figures later this year should not surprise anyone.

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Executive Summaries

New Mexico

New Jersey

New York

Florida

Arizona

Texas

Illinois

California

State Latino GDP Presentations

New Mexico: Fienup      New Mexico: Hayes-Bautista

New Jersey: Fienup      New Jersey: Hayes-Bautista

New York: Fienup      New York: Hayes-Bautista

Florida: Fienup      Florida: Hayes-Bautista

Arizona: Fienup      Arizona: Hayes Bautista

Texas: Fienup      Texas: Hayes-Bautista

Illinois: Fienup      Illinois: Hayes-Bautista

California: Fienup      California: Hayes-Bautista

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As we stated here, many of the $1.9 trillion bill’s provisions “will be borne on the backs of the children and grandchildren of low-income households. Because we care about social justice, we cannot abide such a policy.”

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The 2020 LDC U.S. Latino GDP Report seeks to provide a factual view of the large and rapidly growing economic contribution of Latinos living in the United States. We estimate the U.S. Latino GDP based on a detailed, bottom-up construction which leverages publicly available data from major U.S. agencies. The most recent year for which the core building block is available is 2018. Thus, this year’s report provides a snapshot of the total economic contribution of U.S. Latinos in that year.

As a summary statistic for the economic performance of Latinos in the United States, the 2018 Latino GDP is breath-taking. The total economic output (or GDP) of Latinos in the United States was $2.6 trillion in 2018, up from $2.3 trillion in 2017, and $1.7 trillion in 2010. If Latinos living in the United States were an independent country, the U.S. Latino GDP would be the eighth largest GDP in the world. The Latino GDP is larger even than the GDPs of Italy, Brazil or South Korea.

While impressive for its size, the U.S. Latino GDP is most noteworthy for its extraordinary growth rate. Among the world’s 10 largest GDPs in 2018, the Latino GDP was the single fastest growing.Latino real GDP grew 21 percent faster than India’s and 30 percent faster than China’s.Over the entire period from 2010 to 2018, the Latino GDP is the third fastest growing, while the broader U.S. economy ranks fifth.

The economic contribution of Latinos is a tremendous engine of economic growth within the United States. Latino GDP grew 72 percent faster than non-Latino GDP from 2010 to 2018 and nearly 350 percent faster from 2017 to 2018.

The single largest driver of rapid Latino GDP growth since 2010 is personal consumption. From 2010 to 2018, Latino real consumption grew 133 percent faster than non-Latino consumption. This dramatic increase is driven by large gains in personal income, which naturally flow from Latinos’ rapid gains in educational attainment and strong labor force participation. Whereas the U.S. had average wage and salary growth of just 5.1 percent over the previous five years, wage and salary growth for Latinos averaged 8.6 percent. From 2010 to 2018, growth in the number of people with a bachelor’s degree or higher was 2.6 times more rapid for Latinos than Non-Latinos.  And Latino labor force participation in 2018 was 67.7 percent, more than five percentage points higher than non-Latino.

We note again this year that the importance of labor force growth cannot be overstated. According to Federal Reserve economists, the number of people retiring in the U.S. is forecasted to increase substantially over the next two years, peaking in 2022 at close to 350,000 mostly non-Latino Baby-Boomers retiring each month.

This dangerous shortage of workers is a demographic crisis which threatens the country’s ability to maintain even modest economic growth. Fortunately, Latinos are already well on their way to rescuing the U.S. from this demographic time bomb, adding substantial numbers to the critical category of working age adults. Despite being only 18.3 percent of the U.S. population, Latinos are responsible for 78 percent of the growth of the U.S. labor force since the Great Recession.

Latinos provide a very large and positive demographic punch through both the addition of workers and the formation of households. The number of Latino households grew 23.2 percent from 2010-18, while the number of Non-Latino households grew just 3.8 percent. This is especially astounding given that average Latino household size is also much larger. A healthy rate of household formation is vital to economic growth, as new households increase current and future economic activity.

The family values, hard work and persistence of U.S. Latinos are not only an engine of economic growth, they are a bright spot during an extraordinary year of economic upheaval.

Early evidence from the coronavirus recession of 2020 indicate that Latinos will be a driver of economic recovery. Monthly data show a dramatic contraction of the U.S. labor force resulting from government-mandated shutdowns beginning in March. The data also indicate a stunning recovery in at least one corner of the U.S. Labor market.

From April to June, as government-mandated closures were beginning to lift, Latino Labor Force Participation soared at a rate more than double the rate of Non-Latinos.

Using the Financial Crisis and Great Recession as a reference point, we expect the gap between Latino and Non-Latino Labor Force Participation to widen during the recovery, and we expect Latino perseverance and hard work to once again be a source of resiliency for the U.S. economy. During the darkest days of the Financial Crisis and Great Recession, the gap between Latino and Non-Latino Labor Force Participation surged, increasing fifty percent from 2005 to 2009 and rising continuously from 2010 to 2018. As we’ve argued for two years now, this correlates strongly with the growth of the Latino GDP. And it points to what we can expect following the current crisis.

Latinos are one of the economy’s biggest growth engines, and the pandemic is making this even more true than ever.

Download the full report: 2020 LDC U.S. Latino GDP Report

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Fiscal Dominance

   noun

a situation in which the fiscal authority is so profligate that a conscientious monetary authority is forced to accommodate – that is, the monetary authority must print money in order to maintain government solvency.

Stockholm Syndrome

   noun

feelings of trust or affection felt in many cases of kidnapping or hostage-taking by a victim toward a captor.

Monetary Stockholm Syndrome

   noun

see example below

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