U.S. Labor Market Faces Uncertain Future Amid Policy Challenges

EY-Parthenon senior economist Lydia Boussour has highlighted concerns about the U.S. labor market despite a strong rebound in March employment data. According to Odaily, Boussour noted that the labor market remains fragile, with businesses becoming more cautious in a policy environment filled with uncertainties. Companies are increasingly focused on protecting profit margins and are opting to enhance productivity rather than expand their workforce. Looking ahead, Boussour predicts that the labor market will be largely stagnant by 2026, characterized by selective hiring, limited wage growth, and strategic personnel adjustments amid historically tight labor supply. She anticipates employment growth to be slightly below the breakeven level, with the unemployment rate gradually rising to around 4.7%. Boussour also pointed out that ongoing Middle East conflicts pose significant downside risks, estimating a 40% probability of an economic recession.