Forget Today's Low Unemployment Levels. Suze Orman Says Things Could Change in 2023

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  • The national jobless rate is pretty low right now.
  • Unemployment could pick up if a recession hits in 2023. 
  • Some companies are already starting to downsize staff to cut costs. 

Job loss could become more common in the new year.

At first glance, it would seem that the U.S. economy is in pretty good shape, at least from an unemployment perspective. In October, the national jobless rate sat at 3.7%. That's comparable to where the unemployment rate sat prior to the pandemic. Plus, a lot of companies are still hiring and the gig economy is holding steady.

But there are signs that the jobless situation may be changing for the worse. Over the past number of weeks, a number of large companies have begun laying off workers to conserve costs. And in October, the number of available U.S. jobs fell to 10.3 million from 10.7 million openings the previous month.

It's for these reasons that financial guru Suze Orman warned on a recent podcast episode that workers shouldn't get too comfortable with today's low unemployment rates. Instead, they should gear up for an uptick in layoffs in 2023 -- and prepare accordingly.

Will unemployment levels pick up in the new year?

Financial experts have been cautioning for months that a recession could strike in 2023 as a result of an extreme drop in consumer spending. And that could lead to an uptick in layoffs. 

Now we can't say with certainty that a recession will hit. But even so, we can't ignore the fact that large companies have already started the process of laying off workers during the tail end of 2022. And that trend could continue into the new year. 

How to prepare for a layoff

Getting laid off can be a huge blow -- both emotionally and financially. It's hard to prepare for the former. But the good news is that workers can prepare for the latter so that a layoff doesn't deal such an intense financial blow.

The most important thing to do in that regard is to build up an emergency fund. Having enough cash in a savings account to cover three to six months of essential expenses (or more) could help workers cover their bills in the absence of a paycheck. 

Workers should also do a little research to see what unemployment benefits look like in their states. The rules and payouts can vary from one state to another, so it's important to know what to expect in the event of a lost job. 

Another way to prepare for an uptick in unemployment? Securing a part-time second job. Those who take on work on the side may be able to fall back on that second gig, or ramp up their hours, if their primary jobs wind up on the chopping block. 

We can't say with certainty that U.S. unemployment levels will rise dramatically in 2023. After all, there are still millions of open jobs on the market, and consumer spending has not yet dropped off to a notable degree. But it's important to prepare for a period of economic decline that could include an increase in layoffs. And workers who take that step will be in a much better position to weather that storm should it strike them personally.

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