U.S. Latino economic output grows to $3.6 trillion, new report finds

The U.S. Latino economy grew 13% from $3.2 trillion in 2021 to $3.6 trillion in 2022, according to a new report released Thursday by economic think tank Latino Donor Collaborative and Wells Fargo.

If that happens, this generation will surpass the annual production of India, the UK, France and Canada, making it the world’s fifth-largest economy.

“There is no question that the U.S. Latino economy is a powerful force, characterized by strong GDP growth, significant population growth, high labor force participation rates and improving educational outcomes,” Sol Trujillo, president of the Latino Donor Collaborative, said in the report.

“This is not just a diversity and inclusion issue, it’s a critical business strategy,” Trujillo added.

The report is based on data from 2022, the most recent year for which information is publicly available. It includes data from the U.S. Census Bureau, the Bureau of Economic Analysis, the Bureau of Labor Statistics and others.

Looking at the world’s 10 largest economies from 2017 to 2022, Latinos will have an average annual real growth rate of 4.6%, making them the second fastest growing economy behind China at 5.3%. Latinos’ gross domestic product (GDP) in the United States will also grow 2.6 times faster than the rest of the U.S. economy.

Latino industrial strength remained steady in manufacturing, public administration, accommodation and food services, construction, and transportation.

By state, California again led Latino GDP in 2022. According to the report, the top five states for Latino GDP are:

• California: $935.2 billion
• Texas: $686.6 billion
• Florida: $347.8 billion
• New York: $268 billion
• Illinois: $125 billion

The Latino economic boom has also led to a surge in wealth for this group.

Hispanic household wealth has tripled over the past decade, according to new data compiled by the Hispanic Wealth Project.

That’s two years ahead of the goal the nonprofit set after the Great Recession caused median Hispanic household wealth to drop by up to two-thirds. By 2022, the median Hispanic household net worth will reach $63,400, 3.17 times higher than it was in 2013 when adjusted for inflation.

HPW reported that rising homeownership rates, rising home prices and a surge in Hispanic-owned businesses are all contributing to the steady growth.

But when comparing this group to non-Hispanic white households, a large gap remains, which means the median net worth for non-Hispanic white households was $283,300 in 2022. The median net worth for the general population was $192,160.

“Latinos in the United States are essential to the future of our country,” Trujillo said.

LDC also made projections for the U.S. Latino economy through 2029. Based on the International Monetary Fund’s country GDP projections, the group’s economic output is expected to surpass Japan by 2024 and Germany by 2027.

Trujillo said a big factor is the rate of Latino population growth: “The growth of the Latino population in the United States is a nearly national phenomenon.”

In states such as Colorado, Washington, and Georgia, Latino economies are also growing at a faster pace than non-Latinos. From 2021 to 2022, the U.S. Latino population grew 1.65%, while the non-Latino population grew only 0.08%. This growth has led to a significantly younger Latino population than other races, with a large number of Latinos not yet entering the labor market.

As a result, the U.S. economy is becoming increasingly reliant on Latinos to replenish its working-age population, Trujillo said: “Every 30 seconds, a young Latino turns 18 in the United States.”

“Tapping into the unique and powerful opportunities the U.S. Latino market offers will benefit all Americans,” Trujillo said.

The report’s findings were presented at the L’Attitude conference, which examines the state of Latino leadership, participation and representation in America’s corporate, public, media and entertainment sectors.