A white-collar recession could be approaching as knowledge-based jobs continue to be threatened. For those working within banking, technology and real estate, this could spell major trouble.
After a spike in demand for white collar jobs last year, companies are grappling with too many staffers, leading layoffs to throw a wrench in post-pandemic recovery.
“The sectors that are probably most vulnerable are the ones that hired the fastest,” said William Lee, chief economist at the Milken Institute.
Now, it is workers within the service industry, who bore the brunt of layoffs during the pandemic, that are safe from job cuts.
Although a recession isn’t guaranteed, two-thirds of employers predict that one will occur by the end of the year according to a survey from Principal Financial Group. Simultaneously, quit rates have fallen to their lowest levels in over one year, suggesting that workers are less confident about finding work elsewhere.
Despite the U.S. workforce fully recovering from pandemic-era losses, the makeup of each industry widely varies.
“I think the question is: Have you overhired in certain industries?” said Michael Gapen, head of US economics at Bank of America Corp. “And the data would say, if you did, it probably is in areas like professional and business services, more than leisure and hospitality.”