Today, The Conference Board launched the Job Loss Risk Index. It measures the likelihood of layoffs across the economy—and comes right as the United States stands on the precipice of a recession.
The new index reveals that industries that face the greatest risk of layoffs in the coming months include information services, transportation and warehousing, and construction. Meanwhile, sectors including government, private education services, health care, and accommodation and food services may be the least at risk.
“While a short and shallow recession remains our most likely scenario for the US in 2023, we expect job losses to vary widely by industry. The Index will help leaders in every industry understand the unique dynamics of this recession, judge their own exposure, and make strategic decisions to protect their workforces and bottom lines,” said Frank Steemers, Senior Economist at The Conference Board.
The Index incorporates six factors in ascertaining the likelihood of job losses in a particular industry: its exposure to labor shortages; sensitivity to monetary policy; job function and education levels required; the state of its pandemic recovery; longer-term trends in labor demand; and the age composition and experience levels of its workforce. Insights from the index include:
The information services sector is estimated to have the highest risk of job losses amid the projected upcoming recession:
Employment in the industry grew rapidly during the pandemic as the adoption of technologies including telework, e-commerce, and distance learning fueled growth expectations and stock prices for tech companies, which encompass a large share of the information industry.
Valuations of high-growth companies are more sensitive to interest rate hikes, as these firms are often highly leveraged. As rising interest rates increase the cost of borrowing and servicing debt, tech companies have already started layoffs to manage rising costs.
Also at higher risk of job loss…
Read the full article here
