Warnings of a looming recession have come to a head. Inflation continues to rise, causing chaos in the stock market, and companies are beginning to prepare for the worst with layoffs, hiring freezes, and, in some extreme cases, canceling job offers.
An abrupt shift in labor market dynamics – after months of strong job prospects and rising employee wages – has left many working Americans confused.
“The job prospects are only going to get worse” in the next few months, Lawrence Ball, professor of economics at Johns Hopkins University, tells CNBC Make It. “The question is: How much worse?”
If you’re considering changing roles soon, you should know that while no job is completely recession-proof, some industries tend to do worse than others during a downturn.
During the Great Recession, which lasted from 2007 to 2009, the construction and manufacturing sectors experienced a significant drop in employment, according to Data from the Bureau of Labor Statistics.
That’s because during an economic downturn, Karen Dinan, a Harvard economics professor and former chief economist at the US Treasury, says people typically limit their discretionary spending and delay large purchases, including new cars and homes. She expects these industries to see similar patterns if a recession occurs soon.
However, Paul and Dinan say the most so-called “recession-resistant” industries to work in include healthcare, government, computers and information technology, all of which can provide strong job security during economic downturns.
Paul explains that the common denominator among these industries is that they are less sensitive to changes in interest rates, and people depend on these services “whether the economy is booming or stagnating.”
He adds that education is another stable sector in difficult times, even in schools Struggling for employment and staff retention in the wake of the Covid-19 pandemic. Paul expects there will be an increased demand for employees at colleges and universities across the United States in the event of a recession, as more people will look to higher education “as a way to acquire new skills and improve their employment prospects.”
“People are more willing to go to college if the job market is bad,” he says. “And if you graduate college, and the job market still looks bleak, grad school becomes more attractive.”
Whether you’re looking for a new job or not, Dynan stresses the importance of honing your professional skills so you can become a more competitive and valuable worker. Check out the skills that often appear in job ads you’re interested in and start practicing them, or ask your boss if your company offers any professional development courses or webinars.
“There’s not much you can do on top of your normal job responsibilities,” she says. “But learning the skills employers are looking for, and being able to perform those skills well, is your best insurance.”
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