Is Today's Job Market Really All That Strong? Here's What Suze Orman Has to Say

Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.

KEY POINTS

  • Consumers may be taking comfort in the fact that unemployment is at a 54-year low.
  • It's important to shore up personal savings in case economic conditions decline.
  • Suze Orman isn't convinced the labor market is in such great shape.

It's important not to be fooled by too much positive news.

If you were to do a quick search along the lines of "Is the U.S. economy in good shape?" you'd probably pull up some data pointing to a reassuring "yes." The national unemployment rate recently hit a 54-year low, and that alone might lead you to believe that there's no need to worry about losing your job.

But financial guru Suze Orman isn't convinced that the job market is totally stable and the economy is in a good place. And she cautions workers to do what they can to boost their savings in case layoffs increasingly start coming down the pike.

Don't get too comfortable with today's job market

More than 500,000 jobs were added to the U.S. economy in January. When you see a number like that coupled with record-low unemployment, it might lead you to believe that things are perfectly rosy.

But Orman warns that the job situation very much has the potential to take a turn for the worse, as does the broad economy. First, as Orman likes to remind people, "All indicators are backward-looking indicators."

Our Picks for the Best High-Yield Savings Accounts of 2024

APY
4.25%
Rate info Circle with letter I in it. 4.25% annual percentage yield as of July 14, 2024
Min. to earn
$1
APY
4.50%
Min. to earn
$0.01
APY
5.10%
Min. to earn
$0

It may be that jobs increased in January and unemployment reached a decades-long low. But that's not necessarily indicative of what's to come.

We've already seen a number of large employers lay off staff during the early part of 2023 in an effort to cut costs. If that trend continues or picks up, the national jobless rate could easily rise.

What’s more, we're definitely not out of the woods as far as a recession goes. If the Federal Reserve keeps raising interest rates to fight inflation, which it's likely to do this year, it could drive up the cost of consumer borrowing, from credit card rates to personal loan rates. That could lead to a serious pullback in consumer spending -- and a broad economic downturn.

Once that happens, layoffs could become even more rampant. And workers who aren't financially prepared for one might really struggle.

Shore up your savings now

All told, many workers today have, as Orman calls it, a "false sense of security." A lot of people think they'll be able to just go out and get a job if their current one goes away. But Orman cautions that a lot can change in that regard, and soon. So rather than take comfort in today's seemingly strong labor market, take action.

Pump more money into your savings account so you'll be able to cover several months of bills should your job be taken away. Not every employer that lays off staff offers severance or compensation. And your state unemployment benefits might replace just a fraction of your missing paycheck. So at a minimum, try to save enough to cover three full months of essential bills so that if you need to go without pay for a while, you won't automatically be driven into debt.

At the same time, it's a good idea to work on boosting your job skills and networking. You never know when you might fall victim to a layoff, and having a solid skill set and connections could be your ticket to finding a new job in short order when you need one.

Alert: our top-rated cash back card now has 0% intro APR until 2025

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a lengthy 0% intro APR period, a cash back rate of up to 5%, and all somehow for no annual fee! Click here to read our full review for free and apply in just 2 minutes.

Our Research Expert

Related Articles

View All Articles Learn More Link Arrow