Hi there!

I'm currently about to finish my Master's degree, so I've been in this predicament fairly recently. In fact, during my undergraduate degree I was offered an optional 'thesis' project (which existed in order to give students a taste of what graduate-level research would be like), and now that I'm here doing my Master's thesis I have completely changed what I was first interested in during that undergraduate research project. I think that expecting yourself to specialize so early in the game puts too much pressure on you to settle for an area which you may not be completely sold on. The fact that you already have an interest in economic history certainly narrows this down though, as I have come across a few individuals who have focused on theme rather than period (which to some degree makes a great deal of sense, as some would argue that you can apply the methods of study x history with any period, but of course there are linguistic considerations and such).

What may be helpful to get a start on now if you're quite keen is figuring out the current academic arena of topics which potentially interest you. This can be done by doing some digging and figuring out which scholars are very active in this field, as this will give you a sense of where scholarship may be headed in whichever realm(s) of historical research you're most interested in. If you do decide to continue into graduate studies in history, you will have to become familiar with the scholarship in whichever field you end up focusing on, so this could also give you a leg up in your future studies.

I hope my short blurb here helped a bit. Essentially, try not to stress about picking a field so early in your studies, because chances are you will settle into a niche which interests you. Best of luck! (Additionally, sorry to the mods if this doesn't qualify as an appropriate answer here! This is just my take on the OP's situation.)

In my (admittedly biased) view, Economic history is not a dwindling field, but a thriving one. Never has there been more and more exciting research published, on almost every topic, classic and new. The digitization of documents alone has allowed for progress on questions that would have been nigh unthinkable in previous times, and at much lower costs in terms of long-distance archival research. Newer and more flexible statistical methods have (for better and for worse) encouraged a tremendous proliferation of topics, using econometrics to examine causal questions more broadly. Every old debate is new again, with exciting new papers based on newer and better evidence.

Where economic history is (perhaps) dwindling is in (North American) history departments. The debate over the use of quantitative methods (and the legacy of a [edit: accuracy] forty-five-year-old fight over Time on the Cross) have left a regrettable void in capital-H History departments, which is surely what your professor is remarking on. (Even then, I think there are promising signs that the trend is upwards and not downwards, but this is mostly speculation.) But academia is a big place. Economic Historians work in Economics departments, in Political Science, in Government, in Sociology, in Finance, in Management, at Business schools, and in a couple of rare cases, separate Economic History departments. There are lots of places to do economic history, if that is what you are interested in pursuing.

This probably doesn't help you in the short run to pick a specialisation within your existing program. If you're planning to finish your degree and be done with history as a profession, then you should probably just study what interests you. But if you're potentially interested in pursuing history as a career, take a long hard look at the perennial advice threads, especially before accepting too much advice from insiders about what is and is not a saleable field. History departments are not an easy place to make a living these days, but they aren't the only departments where you can study historical topics.

I find science and technology really interesting, but I have no interest in doing science or making technology (aside from a little programming). I also find philosophy very interesting, but I'm not at all interested in being a philosopher (too much pedantic arguing, not enough grounded-ness). So when I stumbled across the History of Science and Technology I was pretty excited, because it gave me an opportunity to look at these things in a really interested, grounded way — through archival research, etc. I also like that it allows me tremendous range in terms of time periods and regions to study and teach.

This is not necessarily an endorsement of the idea that you or anyone else should choose it based on jobs considerations. That's a very different sort of calculations. It's about the intellectual joy of it. I've managed to turn it into a job, which is great, but that's not a guarantee. I will say that for any field, it will be oversaturated, so the job situation isn't essentially easier for fields with lots of jobs (like American history) versus those without (like history of science), because you get commensurate differences in numbers of applicants as well. My own philosophy is to study the thing you're most interested in, because ultimately that's what it's about, whether you get a job in academia or not. And if you are passionate about it, that can make a big difference in your success as a researcher, writer, teacher, and job candidate, as well.

My other advice is to feel free to not do what your advisor recommends in general when it comes to this sort of "big picture" stuff (when it comes to making sure to turn in your study plan on time, do exactly what they say). Your advisor will ultimately respect you more if you do what you think is the right decision, no matter what they thought. I say this as an advisor whose philosophy is that it's my job to help students achieve what they actually want, not to guide them into things that I might want.