Institution: U.S. Labor Market Remains Fragile, 40% Probability of Economic Recession

Odaily News Lydia Boussour, Senior Economist at EY-Parthenon, stated that despite the strong rebound in U.S. employment data for March, the labor market remains fragile. She believes that in the context of an uncertain policy environment, businesses have become more cautious, their willingness to hire is cooling, and companies are increasingly inclined to protect profit margins and respond by boosting productivity rather than expanding employment. "Looking ahead, we expect the labor market in 2026 to be largely frozen, characterized by selective hiring, limited wage growth, and strategic workforce adjustments while labor supply remains historically tight." Boussour anticipates that employment growth will be slightly below the breakeven level, and the unemployment rate will gradually rise to around 4.7%. "Given the ongoing conflicts in the Middle East, downside risks dominate, with a 40% probability of economic recession," she added. (Jin10)