How Long Will This Red-Hot Job Market Last?

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

Key points

  • At the moment, job openings are plentiful and companies are eager to hire.
  • Things could change quickly in the event of a recession.
  • It might 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 poured extra money into the problem in the form of hiring bonuses and higher wages in a bid to address their labor shortage issues.

But while current labor market conditions put workers and job seekers in a formidable position, we cannot expect things to stay that way indefinitely. In fact, a number of economic experts are already issuing warnings of an impending recession.

If one were to strike, it could force companies to curb large-scale hiring. And this is something workers and job seekers need to be aware of.

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Is the labor market about to cool down?

In August, the national unemployment rate rose 0.2 percentage points to 3.7%, according to the Bureau of Labor Statistics, and the number of unemployed rose by 344,000 to 6 million. This increase in the unemployment rate is not very significant. But it’s still an increase.

To be clear, though, an unemployment rate of 3.7% isn’t terrible. And that’s comparable to where the unemployment rate was before the pandemic. But if the jobless rate continues to rise month-over-month, that should be a potential warning sign for workers that the labor market is weakening.

Additionally, workers and job seekers should pay attention to rate hikes by the Federal Reserve. These are designed to curb inflation by making borrowing more expensive.

If the cost of credit card borrowing and personal loans rises, for example, consumers are likely to start spending less, which could narrow the gap between supply and demand that fuels runaway inflation. But it could also lead to a widespread economic recession, at which point hiring could slow and existing jobs could be lost.

Of course, that is not the situation we find ourselves in today. And so workers and job seekers should use today’s hot job market to their advantage while they can.

How to take advantage of a dynamic job market

Whether you are currently employed or looking for a job, the reality is that companies today cannot afford to lose or abandon talent. And so you might be in a great position to negotiate better pay and compensation.

To that end, do some research to see what the average worker in your industry earns. And then go out and fight for the pay you deserve. This could mean asking your current boss for a raise or asking for a higher salary than what is offered to you following a successful interview.

Also, if you are looking for a new job, do not hesitate to ask for a registration bonus. Even though this sum is modest, it could serve a number of key purposes, from filling up your savings account to reducing the balance on an existing credit card.

It’s hard to say how long today’s strong labor market will last, and much will depend on the direction in which the global economy is heading. But for now, workers and job seekers have the upper hand, and that’s something you might as well take advantage of. while you can.

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