What to watch out for before changing jobs now

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It is still a workers’ market, even if there is high inflation and a possible recession.

But there are some signs that may begin to change.

One big reason: The Federal Reserve’s 0.75 percentage point rate hike announced on Wednesday probably won’t be its last as it tries to push back historically high inflation.

That could lead to “some easing of labor market conditions,” Fed Chair Jerome Powell acknowledged Wednesday.

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Record job openings, which totaled 11.2 million in July, could “fall significantly,” he said. The rate hikes could push up unemployment, which stands at 3.7% according to the latest jobs report.

Recent research by Challenger, Gray & Christmas found that layoffs are at a record low as the job market remains strong.

In the first eight months of the year, employers announced plans to cut 179,506 jobs, the lowest total recorded since Challenger began tracking this job loss in 1993.

Weekly US unemployment claims rise slightly to 213,000

The 2022 total is also down 27% from 247,326 cuts for the same period in 2021.

Today, there are two job openings for every unemployed person in the country, a “pretty remarkable ratio,” said Andy Challenger, senior vice president at Challenger, Gray & Christmas.

“This is the hottest job market we’ve seen in our lives, and it won’t stay that way forever,” Challenger said.

It’s still a good time to switch – with one caveat:

As inflation has hit historic highs, a recent Bankrate.com survey found that 55% of workers say their incomes have not kept up with rising household spending.

The best way to negotiate a big pay raise often comes with a new position, experts say.

“That’s one of the best ways to increase your salary by looking outward,” said Vicki Salemi, career expert at Monster.com.

Inevitably, the current hot job market will cool down. The only question is when.

You won’t find a better environment to find or renegotiate a new position in a year.

Andy Challenger

senior vice president at Challenger, Gray & Christmas

Six months ago, Challenger said he predicted the job market would have cooled down more than it is now. By this time next year, it will likely have cooled down significantly.

But now might be a good time to switch, he said.

“If you’re unhappy and feel like you’re underpaid, you won’t find a better environment in a year to find a new position or renegotiate,” Challenger said. “It’s very, very unlikely.”

One caveat is that many companies have “last in, first out” policies, which can make newly hired workers more vulnerable if a company decides to implement mass layoffs, he said.

Certain sectors are currently more vulnerable to austerity, according to Challenger’s research. The cutbacks in the technology sector are 70% higher than in the same period last year. Meanwhile, cuts in financial technology increased by 765% last year, while the auto industry has seen job losses increase by 232%.

Layoffs are not necessarily the trigger for a higher unemployment rate, Challenger said.

If the labor force participation rate rises — and people who are now on the sidelines come back in — it could lead to an increase in unemployment as the number of job openings shrinks and people take longer to find a job.

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