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

BlockBeatNews · 2026-04-03T16:50:42+00:00

Although the U.S. employment data for March rebounded strongly, economist Boussour pointed out that the labor market remains fragile, with companies' willingness to hire weakening. Future employment growth is expected to be below the breakeven level, with the unemployment rate rising to 4.7%. The probability of a recession is 40%.

BlockBeatNews

2026-04-03 16:50:42

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BlockBeats news. April 4. EY-Parthenon senior economist Lydia Boussour said that despite a strong rebound in the U.S. March employment data, the labor market remains fragile. She believes that against a backdrop of uncertainty in the policy environment, 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, characterized by selective hiring, constrained wage growth, and strategic workforce adjustments despite labor supply still being under historically tight conditions.”

Boussour expects employment growth to be slightly below the break-even level, and the unemployment rate to gradually rise to about 4.7%. “Given that the conflict in the Middle East is still ongoing, downside risks dominate; the probability of an economic downturn is 40%,” she added. (Jin Ten)

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