The pandemic may have triggered massive layoffs as businesses shut down, but it also spawned a new labor trend: the Great Resignation. A recent Pew Research Center survey shows that the nation's so-called quit rate reached a 20-year high last November. But as fear of recession looms amid mounting layoffs, how risky is it to quit your job now?
Experts say workers still have the upper hand for now. The U.S. unemployment rate has held steady at 3.6% for the last four months.
"It seems that the fear of a looming recession has not affected the resignation trend yet," said Jill Gonzalez, a WalletHub analyst.
Gonzalez says employees are still confident in the job market and their chances of finding better jobs.
"Millions of Americans continue to quit their jobs for different reasons, including finding a better workplace that offers more benefits or a higher salary, taking a sabbatical, or starting their own business."
Nevertheless, layoffs and hiring freezes have made headlines in recent weeks.
Who's Laying Off Workers?
Wall Street insiders are said to be bracing for broad cuts at major banks. Elsewhere, electric-vehicle maker Tesla has laid off hundreds of workers in the last few weeks amid production slowdowns. Netflix cut 450 employees in June, after posting a decline in the number of subscribers. Coinbase axed 1,100 workers recently as Bitcoin prices plunge.
Even some health care firms, largely immune to recession woes, are wobbling. CarbonHealth laid off 250 workers in June.
Meanwhile, major tech companies like Meta and Uber have pumped the breaks on hiring.
Should You Quit Your Job Now? Job Opportunities Grow
However, U.S. job growth continued at a brisk pace in May, fueled by hiring at bars and restaurants, even as consumers spend less amid record-high inflation.
Employers added a stronger-than-expected 372,000 jobs in June as the unemployment rate held at 3.6%, the Labor Department said.
On July 6, the Labor Department reported a month-to-month slowdown in the number of job openings at the end of May. It said there were 11.25 million job openings at the end of May vs. April's 11.68 million. However, that's still 5.3 million more than the number of unemployed workers.
Nevertheless Gonzalez says folks should be cautious.
"Even in the current market where there are so many job openings, there is always a risk when you leave an employer without having another job already lined up," she said. "It may take longer than expected to find a new job, which can mean you'll be eating through your savings or incurring credit card debt to stay afloat during your search."
Additionally, in light of rising inflation, finding a job right away is critical, Gonzalez said.
"On the positive side, there are plenty of jobs available in fields such as logistics, dining and hospitality," she added.
Thinking Of Quitting Your Job? States That Offer The Best Opportunities
With the labor force participation rate at around 62%, one of the lowest rates in decades, a recent WalletHub survey reveals employers are struggling the most to fill positions in Alaska, Kentucky and Georgia. Companies are having the least problems in finding workers in New York, Washington, D.C., and Connecticut.
But in a recession, workers should think about where the layoffs might come first. So it might be prudent to remain in or move to a state with a strong economy overall.
"New York, D.C., and Connecticut are among the areas that are more economically stable and have a stronger job market," Gonzalez said. "They could be able to withstand a mild recession without taking too much financial damage."
Gonzalez adds that industry variety and the prevalence of certain industries can also influence the resiliency of a state in the face of a potential recession.
"For example, the essential industries like health care, food, consumer goods and transportation typically perform well during economic downturns," she said.
Despite the still-hot job market, experts agree the momentum can change on a dime.
"The imbalance in the labor market could be resolved in 2022 if there is a recession, even a minor one because economic uncertainty will chill hiring as well as give workers insecurity about job mobility, causing them to stay put," said Boston College Professor Christine O'Brien in reference to WalletHub's findings.
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
