Institution: US Labor Market Still Fragile, with a 40% Chance of Entering an Economic Recession

BlockBeats News, April 4th, EY-Parthenon Senior Economist Lydia Boussour stated that despite the strong rebound in U.S. March employment data, the labor market remains fragile. She believes that in a policy environment full of uncertainty, businesses are becoming more cautious, recruitment intentions are cooling, and companies are increasingly inclined to protect profit margins, responding by increasing productivity rather than expanding employment.

“Looking ahead, we expect the labor market in 2026 to be essentially frozen, characterized by selective hiring, limited wage growth, and strategic personnel adjustments in a historical tight labor supply environment.”

Boussour expects that job growth will be slightly below the breakeven level, and the unemployment rate will gradually rise to around 4.7%. “Given that the Middle East conflict is still ongoing, downside risks dominate, with a 40% probability of an economic recession,” she added. (FX678)