Job Industries That Could Be Affected if the US Enters a Recession
There has been a lot of talk lately about whether or not the U.S. is headed for a recession and many economists believe that we could be in for one in the next year or two, but there is no definite answer yet.
But, the biggest question on many people’s minds is…
Will a recession affect my job industry?
Keep reading as we discuss whether a recession is on the horizon, and which industries are the most and least likely to be affected by it.
What is a recession?
A recession is defined as an extended period of significant negative economic growth, as measured by a country’s gross domestic product (GDP) and rising unemployment levels.
During a recession, businesses often cut back on their spending which can lead to layoffs across their workforce. Consumer spending also drops off during a recession, as people become more cautious with their money.
Will there be a recession?
As of right now, there is no definite answer as to whether or not the U.S. will experience a recession in the near future. However, many experts and economists are speculating that a recession could happen in the next couple of years due to a few key factors.
First and foremost, rising interest rates have caused a domino effect that has changed the economic landscape, and along with a volatile stock market and several other employment industry trends, many are preparing for the worst.
In addition to growing interest rates, inflation has been rising at a faster rate than wages, which means that people’s purchasing power is decreasing.
And finally, The Great Resignation leading to the mass exodus of U.S. workers in search of greener pastures has put even more pressure on the already tight labor market.
What industries would a recession affect the most?
Restaruant & Food Industry
The restaurant and food industry could be one of the hardest hit by a recession since people are typically more willing to cut back on eating out when they are trying to save money.
In addition, as inflation ups the cost of ingredients and supplies, food and beverage businesses pass on their increased costs to consumers, leading to even more people cutting back on restaurant dining and nightlife.
The retail industry is another sector that could be hard hit by a recession as people often cut back on non-essential items like clothing, non-essential electronics, and luxury goods.
In addition, during a recession, businesses may be forced to close down certain stores or make cutbacks, which can lead to job losses in the retail sector.
Travel & Leisure Industry
The travel and leisure industry is another sector that could be affected by a recession as people are reluctant to spend money — or simply cannot afford — expensive travel with their money not going as far and the fear of mass layoffs looming.
What industries would a recession affect the least?
The technology industry is one sector that could weather a recession relatively well as people still rely on technology to live their day-to-day lives, even when the economy is suffering.
In addition, many tech companies are now turning to artificial intelligence (AI) and automation to help with tasks like customer service and data entry, which means that while they may not be hiring for those positions, they will be hiring AI developers, creative designers, and machine learning engineers.
Digital marketing is another industry that could see little to no effect from a recession as businesses still need to market their products and services, even when the economy is struggling.
In fact, during a recession, businesses may actually increase their digital marketing efforts in order to reach a wider audience as more consumers cut back on spending.
With jobs in this sector ranging from media and telecommunications to data processing and motion picture and sound recording, the information industry is also fairly recession-proof.
People will still need their news, entertainment, and access to information even when the economy is struggling, which means that jobs in this sector should remain relatively stable.
Health Care Industry
Due to Covid-19, the demand for health care and social service workers has never been higher. Not to mention the need for health care services may actually increase as people lose their jobs and access to health insurance that covers regular wellness services.
The job market is still strong for now
While the job market is strong at the moment, it’s always good to be prepared for a potential economic downturn. By understanding which industries are most likely to be affected by a recession, you can position yourself in a field that is less likely to feel the effects of an economic slowdown.
So, while there is no definite answer yet, it’s safe to say that a recession is a very real possibility in the near future.
And, while we can’t predict exactly how it will affect the job market, we can be sure that some industries will be harder hit than others. So, if you’re looking for a recession-proof career, consider one in the digital marketing or tech industry.
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