Four Ways to Keep Your Job in a Slowing Job Market

Updated on August 18, 2008.

WHETHER CHATTING WITH co-workers or watching the evening news, the looming "recession" seems an impossible topic to avoid. With such talk comes a heightened sense of anxiety: Just how safe is my job?

Recessions and unemployment have long gone hand in hand. During the recession in the early 1990s, the unemployment rate reached nearly 9%; in the early 1980s, it exceeded 10%. The "r" word hasn't established itself with any certainty (yet). As of July 2008, the unemployment rate was 5.7% and the number of job cuts jumped 141%, since the beginning of the year, according to outplacement consulting firm Challenger, Gray & Christmas.

"The labor market is going to struggle," says Sophia Koropeckyj, an economist at Moody's Economy.com. Even if the Federal Reserve is successful in its efforts to skirt a recession, Economy.com still projects "pretty weak" near-term employment growth. "We're not going to see a large increase in unemployment, but what we are going to see is that businesses, because of declining confidence in the economy — and we're already seeing that — are going to hold off hiring new people," she says.

Should the government's efforts (through rate cuts and an economic stimulus package) fail to keep us from sinking into a recession, the job picture will look much bleaker than that. "We're looking at a contraction of the labor market through the middle of 2009," Koropeckyj says.

According to Merrill Lynch economist David Rosenberg, unemployment will reach 5.75% by the end of 2008 and 6% by early 2009. "To be sure, this is low by historical standards," he wrote, "but would still be very close to the peaks posted during the 2002-03 jobless recovery."

In some industries, it already feels like that bleak job market of five years ago. With the subprime meltdown forcing people to put their homes up for sale and few buyers to absorb that inventory, those working in the housing industry are especially feeling the pinch. The collateral damage is widespread, impacting the livelihood of not only mortgage bankers and realtors, but also home builders and construction companies, building materials manufacturers and even home improvement retailers, says John Challenger, CEO of Challenger, Gray & Christmas, which tracks the labor market.