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

CycleProphet · 2026-04-03T15:26:14+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 companies' willingness to hire weakening. In the future, selective hiring and limited wage growth may occur, with a 40% probability of recession.

CycleProphet

2026-04-03 15:26:14

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

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