By Lorie Konish -
CNBC
It remains a salaried market, even amid high inflation and rumors of a possible recession.
But there are some signs that that could start to change.
One key reason: The Federal Reserve's 0.75 percentage point interest rate hike announced Wednesday likely won't be the last as it tries to curb historically high inflation.
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That could lead to "some softening of labor market conditions," Federal Reserve Chairman Jerome Powell acknowledged on Wednesday.
The record number of job openings, which amounted to 11.2 million in July, could "go down significantly," he said.
Rising rates may push up unemployment, which stands at 3.7%, according to the latest jobs report.
According to a recent study by Challenger, Gray & Christmas, layoffs are at record lows as the job market remains strong.
In the first eight months of the year, employers have announced plans to cut 179,506 jobs, the lowest number on record since Challenger began tracking those job cuts in 1993.
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The 2022 total is also down 27% from the 247,326 cuts for the same period in 2021.
Currently, there are two job openings for every unemployed person in the country, a "pretty remarkable ratio," according to Andy Challenger, senior vice president of Challenger, Gray & Christmas.
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"This is the hottest job market we've ever seen, and it's not going to stay that way forever," Challenger said.
It's still a good time to change, with a caveat
As inflation has reached record highs, a recent Bankrate.com survey found that 55% of workers say their income has not kept pace with rising household expenses.
The best way to negotiate a big raise is often with a new position, according to experts.
“One of the best ways to raise your salary is to look abroad,” said Vicki Salemi, career expert at Monster.com.
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You will not find a better environment to find a new position or renegotiate within a year
Andy Challenger
Inevitably, the current job market will cool down.
It's just a matter of when. Six months ago, Challenger said he would have predicted the job market would have cooled more than he has.
Next year, by this time, it is likely to have cooled down considerably.
But now may be a good time to make a change.
“If you're unhappy and feel you're underpaid, you're not going to find a better environment to find a new job or renegotiate a year from now.
It's very, very unlikely," Challenger said.
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One caveat here is that many companies have a “last in, first out” policy, which could make newly hired workers more vulnerable if a company decides to lay off workers.
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Some sectors are more vulnerable to cuts right now, according to the Challenger study.
Cuts in the tech sector are up 70% from the same period last year.
For its part, cuts in the financial technology sector have increased 765% over last year, while the automotive sector has seen a 232% increase in job losses.
Layoffs do not have to be the trigger for an increase in the unemployment rate, according to Challenger.
If the labor force participation rate rises - and people who are currently on the margins re-enter - that could increase unemployment, as the number of job openings shrinks and people take longer to find work.