The Silicon Valley Bank crash and the Russian invasion of Ukraine have had ripple effects across the world. Experts have been warning about a recession in the US and several other countries. While a recesssion impacts almost all the sectors, but is there any industry that remains unaffected?
Yes, there are some sectors that are less likely to be impacted when compared to the others. “There are sectors that, on average, have not lost jobs typically during recessions," Justin Wolfers, a professor of public policy and economics at the University of Michigan, told USA TODAY. Experts are predicting the US to slip into recession in the latter half of this FY and here's everything you should know as a worker in the USA.
Recession's Impact On Jobs
The first impact is a cut in hiring followed by layoffs. As job openings vanish and roles are cut, there is absolute mayhem in the market. How the recession actually plays out dictates its impact. According to Julia Pollak, chief economist at ZipRecruiter, "A recession accompanied by a financial crisis, a debt crisis, or something like that leads to higher unemployment and more layoffs than one that doesn't."
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Sectors That are Least Impacted By a Recession
The following sectors tend to be less vulnerable compared to the others
Healthcare
People in this sector do not typically lose jobs. Positions like nurses, doctors, and medical assistants are always in huge demand and are pretty resilient irrespective of the financial state of the economy.
Education
According to Wolfers, this sector tends to be much better when all the other sectors are struggling as students who struggle to find work may explore the idea of college. However, it would be wrong to assume that this sector is immune to a recession.
Federal Government
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When pushed into a recession, Wolfers said the federal government looks at spending more money which has resulted in large stimulus packages during the tough times. This keeps federal employment strong.
Garbage Collectors
Well, it has been seen that in both the recessions, this sector was never hampered.
Alcohol Beverage Manufacturers
Distilled beverages are often high-margin products and needless to say they are always in demand. The largest companies hardly saw any losses during both The Great Recession and the 2001 Recession.
Memorial Services
As Phoebe from "Friends" once said, "Even Though It's Christmas, People still die." Recession can never stop the business of this sector.
Restaurant Chefs
Only the pandemic managed to shake up the service industry, but otherwise when it comes to the restaurant business during a recession it's hardly ever impacted.
Beauty Industry
It may come as a surprise but it has been seen that people never stop themselves from investing in small indulgences and this phenomenon had been termed as the lipstick effect. The idea behind this is that even during economic downturns consumers never stop splurging on themselves.
Ways You Can Financially Prepare Yourself For a Recession
Past recessions tell us that nothing can really get us to "calm down" during these times. So, it's important to address the anxiety you feel about your financial well-being. Being afraid of the bear market will not help you in any way.
Stocks historically are known to recover well after a recession. Get rid of credit card debts as soon as the bill arrives. When a recession approaches the interest rates start rising rapidly and hence adhering to this guideline becomes super important. Getting a side gig is also a great way to prepare yourself for a recession, even if you don't need that extra money right now. By getting a side gig you can always try and boost your personal economy as it's better to be prepared for the worst while hoping for the best.
