Weekly Global Economic Update — Deloitte Insights
Week of April 6, 2026
Deloitte’s team of economists provides a comprehensive global economic update covering the latest trends and data shaping markets worldwide. This week’s focus highlights important developments in the United States’ labor market, China’s economic resilience amid crisis, and accelerating inflation in the Eurozone.
US Job Market Shows Mixed Signals
The US government’s March 2026 jobs report came in stronger than anticipated, with payroll employment rising by 178,000 compared to the previous month. Despite this seemingly positive figure, underlying data suggest ongoing volatility rather than a clear upward trend. March’s employment growth added only 260,000 jobs compared to a year earlier, and payroll employment since July 2025 increased by just 95,000 jobs.
Employment levels have fluctuated significantly in recent months. February saw a sharp job decrease of 133,000, offsetting March’s gains. The establishment survey, which excludes self-employed and gig workers, showed job gains in construction (+26,000), manufacturing (+15,000), and transportation and warehousing (+21,000). However, the financial services sector lost 15,000 jobs, the information sector fell by 3,000 jobs, and growth in professional and business services was marginal (+2,000).
The most substantial growth occurred in health care and social assistance, adding 89,900 jobs in March and a remarkable 680,500 over the past year. Leisure and hospitality also expanded by 44,000 jobs. When excluding health care and social assistance, overall employment shrank by approximately 420,500 in the past 12 months, indicating weakness in other sectors.
Two key questions arise from these figures: Why was job growth sluggish in 2025? And what explains the recent rebound? Experts point to restrictive immigration policies limiting labor force growth and corporate cost-cutting efforts in response to tariffs as dampeners on job creation. The strong March increase remains uncertain, as recent employment figures have oscillated month to month.
Wage Growth and Labor Participation
March’s wage data showed average hourly earnings for private-sector workers rose 3.5% year-over-year, the slowest growth rate since May 2021. This slowdown signals weakening labor demand but remains above inflation rates, meaning workers are still experiencing increases in real purchasing power.
Conversely, the household survey revealed a notable drop in labor force participation in March, contributing to a decrease in the participation rate. Despite an actual decline in employment, the unemployment rate edged down from 4.4% in February to 4.3% in March, as the labor force shrank more than total employment. This highlights underlying softness in the US job market from the perspective of the household data.
Impact of Middle East Conflict on Markets and Service Sector
The unfolding conflict in the Middle East has significantly affected financial markets and economic activity. Crude oil prices surged amid fears over prolonged instability, while equities saw modest declines and bond yields increased slightly.
The US services sector, in particular, showed signs of stress. Data from S&P Global’s Purchasing Managers’ Index (PMI) for services dropped from 51.7 in February to 49.8 in March — the first contractionary reading since January 2023. This contraction is notable given that a PMI below 50 signals a shrinking sector.
S&P Global analysts attributed the downturn to rising prices and growing uncertainty fueled by geopolitical tensions, compounded by previous policy challenges including tariffs. Consumer-facing service industries were especially hard hit, with the decline in March ranked among the steepest apart from pandemic-induced lockdown periods.
Additional Global Economic Highlights
- China’s Economy: Despite a challenging global environment, China continues to demonstrate economic resilience, showing steady growth dynamics amid recent crises.
- Eurozone Inflation: Inflation in the Eurozone accelerated in recent data, maintaining upward pressure on prices across member states and signaling persistent supply-side constraints.
About the Author
Ira Kalish is Deloitte Services LP’s chief global economist and a managing director at the firm’s Research & Insights division. With expertise in global economic trends, demographics, and social factors influencing worldwide business, Kalish provides authoritative analysis shaping Deloitte’s economic outlooks.
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