On June 7, President Trump federalized the California National Guard and deployed troops to LA. This followed instances of aggressively conducted ICE raids against various establishments. Economic activity declined in both LA and rural areas engaged in agriculture.
Here are some aggregate indicators for California.
Figure 1: California private nonfarm payroll employment (blue), manufacturing (green), and coincident index (tan), all in logs, 2025M05=0. Source: BLS via FRED, BLS, Philadelphia Fed, and author’s calculations.
Private NFP declined in June. The coincident index (released today) exhibits a sharp break in June. Finally, manufacturing employment shrinkage accelerated in June. One might not think of manufacturing as a big employer of undocumented immigrants, but in fact the deportation/removal policy will impact this sector tremendously.
Notice that given the federalized National Guard deployment is not yet over, and ICE raids continue, it’s likely that we will see more effects in the July statistics. Income statistics will show impacts later on. We have some estimates on the impact in the agricultural sector from Farmonaut (undated).
Source: Farmonaut (undated).
Without knowing the exact sources, it’s difficult to assess the plausibility of these estimates. But it can’t be a positive economic impact.
