Institutions: The U.S. labor market remains fragile, with a 40% chance of falling into a recession.

DeepFlowTech · 2026-04-03T15:26:11+00:00

Although the U.S. employment data for March showed a strong rebound, EY-Parthenon economist Lydia Boussour believes the labor market remains fragile, with weakening corporate hiring intentions. In the future, selective hiring and limited wage growth may occur, with a 40% probability of recession.

DeepFlowTech

2026-04-03 15:26:11

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Deep Tide TechFlow message. April 3, according to data from JIn10, EY-Parthenon senior economist Lydia Boussour said that although U.S. March employment data rebounded strongly, the labor market is still fragile. She believes that against a policy environment full of uncertainty, businesses are becoming more cautious, hiring intentions are cooling, and companies are increasingly inclined to protect profit margins by boosting productivity rather than expanding headcount. “Looking ahead, we expect the labor market in 2026 to be broadly in a freeze state. Its features include selective hiring, constrained wage growth, and strategic workforce adjustments while labor supply remains under historically tight conditions.” Boussour expects that employment growth will be slightly below the break-even level, and the unemployment rate will gradually rise to about 4.7%. “Given that the conflict in the Middle East is still ongoing and downside risks dominate, the probability of a recession is 40%,” she added.

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