How long will this red-hot job market last?

How long will this red-hot job market last?

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Things are great right now, but are there any changes on the horizon?

Key points

  • Right now, job openings are plentiful and companies are eager to hire.
  • Things could change quickly if a recession hits.
  • It may be a good idea to capitalize on the current market and see if you can get a raise or even a new position.

For many months now, companies across a wide range of industries have been desperate to hire workers. And many have been throwing extra money at the problem in the form of sign-on bonuses and higher wages in an effort to solve their labor shortage issues.

But while current job market conditions put workers and job seekers in a great position, we can’t expect things to stay this way forever. In fact, a number of economic experts are already warning of an impending recession.

If one were successful, it could force companies to hit the brakes to hire big. And that’s something workers and job seekers should be aware of.

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Is the job market about to cool down?

In August, the national unemployment rate rose 0.2 percentage point to 3.7%, according to the Bureau of Labor Statistics, and the number of unemployed people increased by 344,000 to 6 million. That increase in the unemployment rate is not very substantial. But it’s an increase nonetheless.

However, to be clear, an unemployment rate of 3.7% is not terrible. And it’s comparable to where the unemployment rate was before the pandemic. But if the unemployment rate continues to rise from month to month, that should serve as a potential warning signal to workers that the labor market is weakening.

Additionally, workers and job seekers should pay attention to rate hikes by the Federal Reserve. Those are designed to cool inflation by making loans more expensive.

If the cost of borrowing credit cards and personal loans rises, for example, then consumers will tend to start spending less, potentially narrowing the gap between supply and demand that has been fueling runaway inflation. But it could also lead to a full-blown economic recession, at which point hiring could slow and existing jobs could be lost.

Of course, that is not the situation we are in today. Therefore, workers and job seekers should take advantage of today’s sizzling job market while they can.

How to benefit from a strong job market

Whether you’re currently employed or looking for a job, the reality is that right now, companies can’t afford to lose or give up talent. And therefore, you could be in a great position to negotiate a better salary and compensation package.

To that end, do some research to see how much the average worker in your industry makes. And then go out there and fight for the pay you deserve. That could mean asking your current boss for a raise or asking for a higher salary than what you’re offered after a successful interview.

Also, if you are looking for a new job, feel free to apply for a sign-on bonus. Even if that sum is modest, it could serve a number of key purposes, from increasing your savings account to reducing an existing credit card balance.

It’s hard to say how long today’s strong job market will last, and much will depend on the direction the broader economy takes. But for now, workers and job seekers have a head start, and that’s one they may well take advantage of. while you can.

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