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The consumer price index reading for October was cooler than expected, fueling hope that inflation may further ease in coming months.
However, housing may dampen improvement due to a lag effect related to rent and home prices.
Shelter is the biggest part of consumers’ budgets and accounts for a third of CPI.

An ‘open house’ flag is displayed outside a single family home on September 22, 2022 in Los Angeles, California.
Allison Dinner | Getty Images

There are signs inflation may fall further in coming months, but housing threatens to mute any improvement.
The consumer price index, a key barometer of inflation, rose 7.7% in October from a year ago. While still quite high by historical standards, that annual reading was the smallest since January.

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The monthly increase was also smaller than expected — giving hope that stubbornly high inflation, and the negative impact it’s had on consumers’ wallets, may be easing.     

Yet the cost of shelter jumped by 0.8% in October — the largest monthly gain in 32 years. That may seem counterintuitive at a time when many observers have said the U.S. is in a “housing recession.”
But shelter inflation — as reflected in the CPI, at least — is likely to stay elevated for several months to a year given its importance in household budgets and the intrinsic dynamics of rental and housing markets, economists said.
“As the housing market cools, this category will also ease but we may have to wait until next year before it meaningfully dampens headline inflation,” said Jeffrey Roach, chief economist for LPL Financial.

Housing is the biggest piece of household spending

The U.S. Bureau of Labor Statistics, which issues the CPI report, breaks the “shelter” category into four components: rent, lodging away from home (e.g., hotels), tenants’ and household insurance, and owners’ equivalent rent of residences.

Rent and “owners’ equivalent rent” are by far the most significant.   

The latter tries to put homeowners on parity with renters. It essentially reflects what homeowners would themselves pay to rent their house, said Cristian deRitis, deputy chief economist at Moody’s Analytics.
Housing is the single biggest chunk of spending for the average consumer. The overall CPI weighting reflects that: Shelter accounts for 33% of it, the most of any category. Shelter therefore has an outsize impact on overall inflation from month to month.
The shelter category is up 6.9% in the last year.

The rental and housing markets are cooling

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Flagging demand has led home and rental prices to cool or moderate in many areas of the U.S.
New U.S. home listings in the month, through Nov. 6, were down 17.5% compared to the same period a year earlier, according to Redfin, a real estate brokerage. The typical sales price, $359,000, was down over 8% from its $392,000 peak in June, according to Redfin.
Mortgage demand has fallen as rates steadily climbed to a recent peak over 7%, though rates declined sharply last week.
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Meanwhile, rental inflation has slowed in 2022 from its breakneck pace last year, Zillow data suggests.
Americans paid an average $2,040 market rent as of Oct. 31, according to the Zillow Observed Rent Index, which is seasonally adjusted.
That rent price was up 0.31% from a month earlier, on Sept. 30. But the pace of that growth has slowed for four consecutive months. By comparison, rents had jumped by about 1% in the month from end-May to late June. Rental inflation touched 2% a month in July and August 2021, according to Zillow data.

Why shelter prices lag

The CPI for “shelter” has historically lagged home price changes by four quarters, which suggests that shelter “will continue to put upward pressure on overall inflation through the first half of 2023,” according to deRitis.
The lag effect is largely due to how long it takes for leases to roll over into a new contract. Landlords typically renew leases every 12 months, which means current price dynamics won’t be reflected in new contracts for a year.
In this sense, housing is somewhat of an outlier among other CPI categories. Consumers don’t agree to pay the same price for chicken or eggs for a whole year, for example.
“Housing has some unique aspects to it,” deRitis said.
And rent tends to be “sticky,” according to economists — which means the total dollar amount of one’s monthly rent generally doesn’t decline; it tends to stay the same or increase with each new lease.

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How a company handles a layoff can have a major impact on its future success.
Experts advise treating departing employees with respect and empathy.
Leaders should never say, “[W]e can do more with less,” said Eric McNulty, who teaches crisis leadership at Harvard University.

High-profile layoffs at Meta and Twitter and planned cuts at Disney have heightened concerns on the part of managers and senior executives at employers nationwide who are struggling with how to lead a team through a round of corporate downsizing. 
How a company handles a layoff can have a major impact on its future success. Poorly managed, a reduction in the workforce can damage a company’s reputation.

“You don’t want those you just laid off to go now splatter all over Glassdoor or somewhere else how horrible you are,” said Eric McNulty, associate director of the National Preparedness Leadership Initiative at Harvard University. 
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Former employees could go on to be future customers, partners or colleagues.
“You may actually want these people back or refer people back to you later when you’re once again hiring,” McNulty said. “So you want to have that alumni network in good shape.”

Be straightforward and transparent

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When announcing layoffs, experts say, business leaders being both straightforward and transparent about the reason for the job cuts and their impact is an essential first step.

“Be clear, be careful and be compassionate,” said McNulty, co-author of “You’re It: Crisis, Change and How to Lead When It Matters Most.”
“Make sure people understand why you’re doing this,” he added. “Make the business case to them and not the usual corporate speak of ‘market conditions.'” 
Leaders should also explain “other options they considered, how they hope to not have to make the decision again and how they are treating impacted employees,” said Paul Wolfe, a human resources advisor and board member at PayScale.

Communicate with empathy

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Messages regarding layoffs should come from individual leaders who are “front and center,” not “HR” or “leadership,” said Jennifer Benz, a senior vice president at the benefits communications firm Segal Benz.
Leaders need to “show empathy” and be careful not to focus on their own feelings “rather than being sympathetic to the situation they have created for their workforce,” she said. 
Wolfe said one-on-one conversations are better than group meetings in discussing layoffs with your team, and planning the logistics of communications is also important.
“Ensure system access and removal from directories does not happen before the employees are communicated to,” Wolfe said. “I respect companies protecting their resources but how they treat impacted employees is very telling to employees that are still working there.” 
“These employees were not criminals and should not be treated as such,” he said.

Spell out the details

Don’t make employees who have been cut do the legwork when it comes to understanding severance pay, job placement or reskilling and upskilling support, health coverage and other benefit information, experts said. Spell it all out — and be ready to answer questions. 
Laid-off workers may ask for more information or request other perks, and leaders should have the answers. Columbia Law School professor Alexandra Carter recommended companies be ready if employees ask to provide a letter or formal email from the HR department stating a departing employee was laid off — and not fired for cause or performance. 

Be mindful of remaining workers’ concerns

Companies should “recognize this is a very difficult time for people who remain with the organization” as well, Benz said. “Make sure managers and leaders are available for remaining employees and can be clear about the future without overpromising.”
“Reinforce support resources, including mental health benefits,” she added.
Inform remaining workers about the changes that may need to be made in light of job cuts.
“Talk about what we are going to stop doing now that we have cut a big part of this organization until we figure out how we can work as effectively as possible,” McNulty said.

Benz said business leaders should be clear about the future, and make sure any promises are realistic and will be followed by action.  
What should leaders not say? “We should never be saying we can do more with less,” McNulty said. “If you could do more with less, you should have been doing it before.” 

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Apple CEO Tim Cook visits the Apple Fifth Avenue store for the release of the Apple iPhone 14, New York City, September 16, 2022.
Andrew Kelly | Reuters

The fall rally seems to have regained its strength this past week.
A better-than-expected reading of the consumer price index last week lifted investor sentiment and pushed the Dow Jones Industrial Average to a 1,200-point jump on Thursday. The gains continued on Friday, and all three major averages advanced for the week.

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Nevertheless, investors need to keep a level head and a focus on the long term as they pick out stocks for their portfolios.
Here are five stocks chosen by Wall Street’s top pros, according to TipRanks, a platform that ranks analysts based on their past performance.

Apple

In an unusual move, Apple (AAPL) announced that the company is expecting lower production numbers for the iPhone 14 as a consequence of repeated lockdowns in China. Granted, Apple revenues are likely to take a hit over the next quarter or two, but the longer-term outlook for the business with multiple secular growth avenues does not change.
JPMorgan analyst Samik Chatterjee agrees. Acknowledging the downside risks for the coming few weeks as Apple grapples with reduced capacity at its largest production site, the analyst believes that brand loyalty will come into play to ease the pressure. That is, iPhone consumers are ready to wait longer for delivery. This will ensure that among all other Apple products, iPhones will face the least demand destruction as a result of supply pushouts. (See Apple Financial Statements on TipRanks)
Chatterjee also shows how risks are spread out over the longer term, and short-term disruptions shouldn’t be a deterrent for investors. “Supply chain challenges have been frequent the last couple of years, and there is limited evidence that delays in shipping devices have had any impact on overall volumes for a product cycle (example: iPhone 12 or iPhone 13) over a multi-quarter period,” the analyst said.

Chatterjee reiterated his buy rating as well as his $200 price target on Apple. The analyst has been ranked 724th among more than 8,000 analysts followed on TipRanks. Moreover, 51% of his ratings have been profitable, resulting in average returns of 9.5%.

O’Reilly Automotive

O’Reilly Automotive (ORLY), a retailer of automotive parts, tools, supplies, equipment and accessories, delivered what Wells Fargo analyst Zachary Fadem called a “Q3 Gem.” An EBIT margin of more than 15.25% year over year was the company’s best in 2022.
Despite an uncertain outlook for the retail sector in the face of slowing demand and high inflation, Fadem remained upbeat about the company’s prospects, and even raised the price target to $850 from $800, while maintaining a buy rating on the stock.
Sales for O’Reilly’s do-it-yourself business were up by a low single-digit percent in the third quarter. The analyst observed that this growth suggests stable three-year DIY trends. (See O’Reilly Auto Stock Investors on TipRanks)
“While broader retail grows increasingly cloudy, ORLY delivered its best quarter of FY22, and considering best-in-class execution, offensive/defensive characteristics, and a fresh round of upward revisions, we like the setup into FY23,” observed the analyst.
Fadem is one of the top 100 analysts on TipRanks, ranked at No. 81. He has a success rate of 65%. Additionally, each of his ratings generated 18.2% on average over the past 12 months.

Cars.com

Automotive products and services provider Cars.com (CARS) pulls in more than 27 million unique users every month, making it a top marketplace for car purchases and dealerships. The company has also made a few strategic acquisitions like CreditIQ, and Accu-Trade, which have helped Cars.com expand into domains like auto financing and used car transactions.
The company recently delivered its quarterly results, which, Barrington Research analyst Gary Prestopino says, “highlights continued progress despite a challenging environment.” (See Cars Hedge Fund Trading Activity on TipRanks)
The analyst highlighted the momentum in the adoption of Cars.com’s Digital Solutions. Importantly, he pointed out that the adoption rate the company is witnessing now is a fraction of its total potential, “as adoption of all Digital Solutions by a dealer can easily double ARPD (average revenue per dealer).”
“Cars.com’s financial results and long-term outlook continue to improve, yet this improvement is not being reflected in the valuation of the stock,” said Prestopino, who has a buy rating and a $25 price target on CARS.
Ranked 68th in an over 8,000-strong database of analysts on TipRanks, Prestopino has delivered profitable ratings 57% of the time. Each of his ratings has returned 29.6% on average.

Veeco Instruments

Semiconductor process equipment manufacturer Veeco Instruments (VECO) is facing a slowdown in a few aspects of its business on account of soft mobile and computer equipment sales. Nonetheless, Benchmark analyst Mark Miller points out several areas of strength in the business that are hard to overlook.
Veeco’s laser annealing systems for logic applications are gaining traction among customers, as is clear from the increase in orders during the third quarter.
Miller expects a $5 million impact on the top line in the fourth quarter due to trade restrictions with China. Nonetheless, the company is confident it will be able to ship most of its Chinese backlog, as “most of Veeco’s tools are used in trailing edge applications.” (See Veeco Blogger Opinions & Sentiment on TipRanks)
Despite the near-term headwinds that await Veeco in the next one or two quarters, Miller believes that the recent decline in VECO’s share price has fully discounted the likelihood of lower earnings in 2023 compared to 2022.
The analyst reiterated a buy rating on the stock with a price target of $25. Miller ranks 254th among more than 8,000 analysts tracked on the platform. Over the past year, 51% of his ratings have been profitable, returning 15.1% on average.

Starbucks

Coffee giant Starbucks (SBUX) is riding on strong same-store sales in the U.S. with its “affordable luxury resonating with consumers,” according to BTIG analyst Peter Saleh. A return to normalcy has been the theme that has lifted the company’s revenues. The analyst believes that the momentum of customer traffic will continue to build now.
Saleh is also upbeat about Starbucks’ same-store sales in China, which are expected to surge remarkably after a Covid-led decline. “We believe this trajectory, coupled with the addition of a new store every nine hours, should unlock significant earnings power as the year progresses and into FY24,” said the analyst. (See Starbucks Stock Chart on TipRanks)
Saleh has an interesting suggestion for the company to help cover the investments made by Starbucks toward wage increases and other employee benefits. The analyst believes that a little more aggressiveness in menu pricing will not affect sales that much, and a mid-single-digit price hike could offset the aforementioned cost to the company.
Peter Saleh reiterated a buy rating on the stock with a price target of $110. The analyst ranks No. 445 among more than 8,000 analysts tracked on TipRanks. His ratings have been successful 62% of time and each of the ratings has delivered average returns of 11%.

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Company: Splunk (SPLK)

Business: Splunk is a leading provider of application software that collects and analyzes data from digital systems to help organizations identify security threats and monitor IT infrastructure. The company can take significant amounts of unstructured data from various systems and come up with insights that help alert IT teams to potential failures or breaches.
Stock Market Value: $13.9B ($85.67 per share)

Activist: Starboard Value

Percentage Ownership: nearly 5.0%
Average Cost: n/a
Activist Commentary: Starboard is a very successful activist investor and has extensive experience helping companies focus on operational efficiency and margin improvement. Starboard also has a successful track record in the information technology sector. In 48 prior engagements, it has a return of 34.45% versus 13.57% for the S&P 500 over the same period.

What’s Happening?

Behind the Scenes:

Starboard views Splunk as an opportunity to own a high quality and sticky business at an attractive valuation with the potential for significant value creation through a better balance of growth and profitability. Splunk’s software is mission critical for most companies, and it has a highly recurring business with approximately 22,000 customers, including 95 of the Fortune 100 companies. Splunk has a leading market share and is considered the “gold standard” in the log management and security markets.

Over the past several years, Splunk has been undergoing a complex business transition. The company has been going from a perpetual license to subscription-based model, leading to negative free cash flow as they transitioned to an annual invoicing model in 2019. It is near the end of this transition. In 2022, it began generating positive free cash flow for the first time since the transition began.
This is a typical Starboard investment – a company with strong top-line growth and enviable market position that needs help with optimizing growth and margins. Often this requires a change in management. Well, good news for Starboard and other shareholders: This is already happening.
In November 2021, CEO Doug Merritt stepped down. In March 2022, Splunk announced it would appoint Gary Steele, founding CEO of Proofpoint, to the helm. Splunk is now searching for a new CFO. Steele has a history of operational execution. In August 2021, Thoma Bravo bought Proofpoint at all-time high prices. Starboard believes that there is significant opportunity for the new management team to improve operational performance.
Technology companies like this are generally compared on a growth plus profitability metric. Splunk currently has a 17% growth rate and an 11% operating margin, giving it a combined 28, versus a peer median of 47. Starboard believes that Splunk’s operating margins can get to at least 30% (peers are currently at 26%) and revenue growth can exceed 20% (peers are at 21%), which would put it right up there with the peer median. Starboard believes that achieving this could double the company’s valuation. 
With a new management team, it is not as urgent that Starboard get board seats right away. They will likely work with Splunk as an active shareholder. If they do go on the board in the short term, it will be because the company invites them on after seeing how valuable Starboard can be and has been in situations like this. If this does not happen by Feb. 16 — when the shareholder director nomination window opens — and there is no marked improvement in operations, we will likely see Starboard make director nominations.
While this is clearly an operational engagement for Starboard, it must be noted that there is another opportunity to create shareholder value here. When an activist takes a position at a company, it puts that company in pseudo-play with potential acquirers often coming out of the woodwork. It is possible that something like that could happen here. In February, when Splunk had an $18.4 billion market cap, the Wall Street Journal reported that Cisco made a $20-plus billion offer to acquire the company. You would think that their interest level has piqued a little with Splunk now trading at a $12.7 billion market cap.
Ken Squire is the founder and president of 13D Monitor, an institutional research service on shareholder activism, and he is the founder and portfolio manager of the 13D Activist Fund, a mutual fund that invests in a portfolio of activist 13D investments. Squire is also the creator of the AESG™ investment category, an activist investment style focused on improving ESG practices of portfolio companies.

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Between the sky-high cost and student loan burden, more students are taking a closer look at college’s return on investment.
When it comes to value, what you study may be the most important factor.
Graduates entering the workforce with good career prospects and high starting salaries are the most satisfied with their major, according to job site ZipRecruiter.

Even with college application season in full swing, many families are questioning whether a four-year degree is still worth it. 
Some experts say the value of a bachelor’s degree is fading and more emphasis should be directed toward career training. A growing number of companies, including many in tech, are also dropping degree requirements for many middle-skill and even higher-skill roles.

However, earning a degree is almost always worthwhile, according to “The College Payoff,” a report from the Georgetown University Center on Education and the Workforce.
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Bachelor’s degree holders generally earn 84% more than those with just a high school diploma, the report said — and the higher the level of educational attainment, the larger the payoff.
When broken down by areas of study, however, the difference is striking. Students who pursue a major specifically in science, technology, engineering and math — collectively known as STEM disciplines — are projected to earn the most overall.
In addition to STEM, health and business majors are among the highest-paying, leading to average annual wages that are higher at the entry level and significantly greater over the course of a career compared with liberal arts and humanities majors, the Georgetown Center found.

10 most-regretted majors: After graduation, ‘reality hits’

Still, 44% of all job seekers with college degrees regret their field of study.
Journalism, sociology, communications and education all topped the list of most-regretted college majors, according to ZipRecruiter’s survey of more than 1,500 college graduates who were looking for a job.

Although students may be drawn to those fields while they’re in school for reasons beyond salary and job security, “when we graduate, reality hits,” said Sinem Buber, ZipRecruiter’s lead economist.
“When you are barely managing to pay your bills, your paycheck might become more important.”
Of graduates who regretted their major, most said that, if they could go back, they would now choose computer science or business administration instead.

Good prospects, higher pay means less regret

All in, the top-paying college majors earn $3.4 million more than the lowest-paying majors over a lifetime.
Graduates entering the workforce with good career prospects and high starting salaries are the most satisfied with their field of study, job site ZipRecruiter also found.

Computer science majors, with an average annual starting salary of almost $100,000, were the happiest overall, according to ZipRecruiter.
Students who majored in criminology, engineering, nursing, business and finance also felt very good about their choices.
Career outcome sets the tone, said Buber. “Pay is still most important,” she said, but “job security is now becoming more important. That happens whenever we have the fear of a recession.”
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Democratic or Republican control of the House and Senate still has not been decided.
But there are some lessons investors can take away from this week’s midterm elections.

Election workers open mail in ballots at the Maricopa County Tabulation and Election Center in Phoenix on Nov. 11, 2022.
Justin Sullivan | Getty Images

It may take until December to know which political parties control both chambers of Congress after Tuesday’s midterm elections.
But that does not mean your personal investment strategy should also stay up in the air.

As uncertainty on the outcome of some key races looms, the coming results may not prompt big market reactions, according to Dan Egan, vice president of behavioral finance and investing at Betterment.
“We still effectively have kind of a balanced government, which is actually something markets usually like,” Egan said.
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In a note on the midterms published this week, UBS also signaled the results may be positive for the markets.
“Regardless of the final outcome, we are looking at a divided government, which increases the chance of gridlock and limits legislative action,” wrote Solita Marcelli, Chief Investment Officer Americas at UBS Global Wealth Management.  

“This is typically good for markets as it reduces policy and regulatory risk,” she said.

Watch out for political biases in investing

Investors who try to read the tea leaves as to what one party or another’s control could mean for future returns on stocks may be in for disappointment.
Portfolios of 60% stocks and 40% bonds tend to perform the same regardless of which party holds office, research from Vanguard has found.

Yet many investors tend to suffer from biases that the other team or party winning is bad, according to Egan.
“The more partisan an individual is, the more likely they are to say if you’re a Democrat or a Republican, ‘Well, the stock market is going to do bad because the economy is going to do bad,'” Egan said.
That may lead those same investors to reduce the amount of risk they are taking on, regardless of whether there’s a real reason to do that, he said.

Keep in mind how little control any given set of politicians has over the stock market or the economy in general.

vice president of behavioral finance and investing at Betterment

To combat those reactions, it can help to compartmentalize.
“Keep in mind how little control any given set of politicians has over the stock market or the economy in general,” Egan said.
What’s more, if you take investment risk off the table in response to the results, you could miss out on the market’s upside.
The S&P 500 Index tends to beat the overall market in 12 months following a midterm election, with an average return of 16.3%, according to a U.S. Bank analysis.

Looking ahead to the 2024 election

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The midterm polls — which decide the Senate, House and ballot initiatives — may be good preparation for the presidential election.
“It’s the junior varsity game before the varsity game, at least in terms of thinking about how you felt and feel during the election cycle, especially with regard to investment decisions,” Egan said.
Investors may want to get started thinking now about key themes that could be affected by an election that may affect their personal finances, such as proposals to reduce state and local tax deductions, for example.
“Don’t think about politicians; think about policies,” Egan said.

What’s more, it helps to plan in advance what moves you will make based on hypothetical outcomes.
Three weeks to one month before the next election, imagine the scenarios that could happen on election day and how you would change your portfolio.
Then, set a reminder to go over those plans again in the week before ballots are cast.
The result is you will have a plan you can execute that you came up with when you were calm, Egan said.
Once votes start coming in, it also helps to keep some distance, so you do not get caught up in the moment.
“You are probably better off in terms of your returns and your stress level if you try and tune out and do something else other than pay attention on those days,” Egan said.

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President Joe Biden intends to nominate Danny Werfel — a former budget official and private sector leader — to become the next IRS commissioner.
The nomination comes at a critical time, as the agency prepares for an infusion of nearly $80 billion over the next decade.
If approved by the Senate, Werfel will oversee plans for the IRS overhaul, along with a backlog of millions of returns.

The Internal Revenue Service building in Washington.
SAUL LOEB/AFP via Getty Images

New role a ‘challenging assignment,’ former IRS commissioner says

Biden’s nomination comes at a critical time for the agency. After another difficult filing season, the IRS is still wrestling with a backlog. As of Nov. 4, there were 4.2 million unprocessed individual returns received this year, according to the agency.  

“I look at the numbers and see millions of taxpayers that are still waiting for their returns to be processed,” wrote National Taxpayer Advocate Erin Collins in a blog post Thursday. “Tax refunds are a lifeline for some taxpayers and important for almost all.”
Mark Everson, a former IRS commissioner and current vice chairman at Alliantgroup, said it’s a “challenging assignment,” and hopes for a swift confirmation from Congress.
“They need to get somebody in place promptly because the services are still inadequate, there are major questions on data security and the filing season is fast approaching,” said Everson, who served the agency under President George W. Bush.  

Yellen in August outlined top priorities for the $80 billion in IRS funding, including clearing the backlog, improving customer service, overhauling the agency’s technology systems and hiring IRS employees to replace retiring workers.
While the influx of IRS funding has been controversial among some Republicans, Everson expects to see transparency during future hearings as the agency irons out spending plans.   
“Tax administration has become too much of a political issue,” he said. “My hope is that [Werfel] will be able to dial that down a little bit and just talk about what’s working, what’s not working and what needs to be fixed.”
IRS Commissioner Charles Rettig’s term with the agency ends Saturday.

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Know your legal rights. Companies have some responsibilities to employees they are laying off.
If you’re offered a severance plan, you may be able to negotiate additional benefits.
Ask for references and connect with your network.

Srdjanpav | E+ | Getty Images

Layoffs at tech giants Twitter and Meta this week have affected thousands — and they’re just the latest examples in a downsizing trend that was already taking place across the industry. 
The news has put a spotlight on what rights employees have in mass layoff situations. While the laws around workforce reductions vary by location and employer size, there are steps anyone can take to help cope with being let go.

In addition, dealing with the emotions around a layoff is probably the hardest part for most people, but these three steps will at least help you protect yourself financially as you contemplate what comes next in your working life.

1. Make sure your employer complied with the law

If you’ve gotten notice you are being terminated, experts recommend checking that your employer has complied with the law.
Employment in the U.S. is typically “at will,” meaning that a company can let employees go at any time. But companies do have some responsibilities.
In mass layoff situations for larger firms, companies that fulfill certain criteria are required by federal law to provide employees 60 days’ notice. The WARN Act is meant to provide workers with sufficient time to seek other employment or retraining opportunities before losing their jobs. 
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While employees can be fired for any reason, they can’t be let go for an illegal reason. “I sometimes see layoffs of one person,” said Kellee Boulais Kruse, a principal at The Employment Law Group, based in Washington, D.C. “That’s pretty suspicious.”
For example, if a newly laid off employee had just disclosed they were sexually harassed, have a disability or are going to have a baby, that could be an illegal firing. Small layoffs get more scrutiny, but with large layoffs it’s difficult to prove individuals were targeted if an entire department was let go.
Don’t wait to consult with an attorney if you think you may have a case, advises Kruse.

2. Negotiate your severance offer

Bill Varie | The Image Bank | Getty Images

Employers are not required by federal law to offer severance, but if they do those contracts can often be negotiated.
Companies offer severance to keep goodwill with former employees, keep workers from disclosing company secrets and to avoid potential lawsuits. Severance agreements typically come with a waiver of liability that has to be signed before any payment is made. 
Don’t rush into signing an agreement. While it varies based on the age of the worker and state laws, employees typically are given a few weeks before they have to sign. “If someone suspects that they’ve been laid off or fired for an illegal reason, they should speak to an attorney before signing,” said Kruse. 
There could be room to negotiate. Often the pay amounts are set, but try to get the maximum that matches your experience and tenure with the company. Other benefits may be available to those who ask.

“Negotiate for continued health insurance if possible, and see if your employer will cover your premiums during the time you are receiving severance,” said Alexandra Carter, a professor at Columbia Law School and author of “Ask for More: 10 Questions to Negotiate Anything.”
Outplacement services, resume assistance and coaching may also be something an employer might help arrange. Some firms might let you keep a work-issued laptop or cellphone if you ask. 

3. Prepare for what’s next

Ask for references. There’s no shame in a layoff, but if your layoff wasn’t a high-profile event, you can ask your former employer for a letter or email stating that you were laid off and not fired for cause or performance. 
“You are still a valid person, a good contributor [and] you will find somewhere else to go,” said Eric McNulty, associate director of the National Preparedness Leadership Initiative at Harvard University. 
Be courageous in reaching out to people you may not know well, he says. “The research shows that your loose networks, those extended connections will be more useful to you than your immediate connections, just because they’ve got more opportunities you’ve never heard about.”

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