As the Trump administration intensifies its crackdown on undocumented immigrants, a shadow is being cast over the U.S. real economy.
The fallout from immigration enforcement has led Latino consumers to limit outings and cut spending, delivering a direct blow to the sales of major consumer goods companies across the U.S. Additionally, the mass exodus of immigrant workers, who often fill low-wage, low-skill jobs, is expected to inflict serious damage on the manufacturing sector.

According to The New York Times (NYT) and other sources, workforce attrition is accelerating across industries. As Immigration and Customs Enforcement (ICE) expands its crackdowns on undocumented immigrants to restaurants, construction sites, and manufacturing plants, more workers are failing to show up. Reuters reports that federal authorities have raised their daily arrest target for undocumented immigrants from 1,000 to 3,000, with both the scope and intensity of enforcement increasing.

Immigration law expert Shannon Stevenson noted, “I’m getting dozens of calls daily from businesses nationwide. Many are worried about losing skilled workers, and some are even considering shutting down operations.”
As authorities ramp up pressure, companies are developing internal response protocols to share with employees. Employers are reviewing workers’ IDs and employment documents to reduce the risk of illegal hiring, while advising staff to request warrants if ICE agents conduct surprise inspections. Companies are also instructing employees to document any items seized by authorities and to record the names of individuals detained.

The consumer goods sector, including food, beverage, and restaurant industries, is also taking a direct hit. Intensified enforcement has deterred Latino immigrants from going out, leading to a noticeable contraction in consumer spending.
According to The Wall Street Journal (WSJ), companies like Coca-Cola, liquor brands, and fast-food franchises have issued warnings about declining sales due to reduced purchases by Latino consumers. In its first-quarter earnings report, Coca-Cola cited a 3% drop in North American sales compared to the previous year, attributing part of the decline to reduced purchases by Latino consumers.

Consumer goods companies like Colgate-Palmolive, liquor company Constellation Brands, and fast-food franchise Wingstop also reported first-quarter sales declines due to reduced spending by Latino customers. Constellation Brands relies on Mexican beer brands like Modelo and Corona for more than two-thirds of its U.S. revenue.

These companies pointed to fear and anxiety surrounding immigration crackdowns as the primary reasons for the reduced purchasing power of Latino consumers in the U.S.
Regis Schultz, CEO of JD Sports, which operates the shoe retailer Shoe Palace, said during a recent earnings call, “We’ve seen a sharp drop in customer visits, and the impact of immigration policies is clearly felt.”

The owner of a convenience store in Plum Grove, Texas, where Latinos make up a significant portion of the population, complained, “I often see ICE agents in the parking lot, and it’s scaring customers away.”
Constellation Brands, which serves a large Latino customer base, reported that in a recent monthly survey, 75% of Latino respondents said they had reduced dining out.

The broader issue is that the fallout from this situation could have long-term negative effects on the economy. In particular, a reduction in immigrant inflows, which have played a critical role in the U.S. labor market, could drag down long-term economic growth.
David Seif, an economist at Nomura Securities, warned, “A decline in immigrant inflows could significantly impact the U.S. economy. Slower growth would also limit the Federal Reserve’s room to cut interest rates.”