US college graduates face harsh job market amid economic uncertainty | Education News
May Graduates Face Tough Job Market Amid Economic Uncertainty
New York City, USA – Each May, soon-to-be college graduates converge on Washington Square Park in New York City, adorned in caps and gowns—often in the purple colors of nearby New York University. This gathering marks the conclusion of their collegiate journey as they prepare to navigate an uncertain job market.
Julie Patel, who recently earned a master’s degree in public health, finds her graduation bittersweet due to a challenging job market.
“I think expectations upon entering this program and what I’m facing now in terms of job availability are two very different things,” Patel told Al Jazeera.
Like many of her peers, Patel is entering a precarious labor landscape characterized by a variety of pressures, including tariffs, the rise of artificial intelligence, global conflicts, and significant government funding cuts in her sector. These factors have contributed to a slowing hiring trend, particularly for recent graduates.
The United States Bureau of Labor Statistics reported that, as of March, there were 6.9 million job openings available. While hirings saw a slight increase of 655,000 to 5.6 million, separations also rose to 5.4 million. This indicates that those currently employed are largely remaining in their positions, making it increasingly difficult for new entrants like Patel to find work.
“The depressed hire rate indicates that it is more challenging for newcomers to gain a foothold in the job market,” said Elise Gould and Joe Fast in a recent analysis by the Economic Policy Institute.
They noted, “The decrease in the quits rate signals a reduction in overall turnover, as both workers and employers hesitate to make transitions amid economic uncertainty, often linked to chaotic policy decisions.”
The latest jobs report reflected modest growth, with 115,000 positions added, primarily in healthcare, transportation, and retail. However, significant losses were noted in white-collar sectors, with financial activities losing 11,000 jobs and information services shedding 13,000.
Overall job growth has sharply declined this year. The average number of new jobs created monthly in 2026 stands at 68,000, a considerable drop from 186,000 in 2024 and 251,000 in 2023. Aleksandar Tomic, associate dean for strategy at Boston College, commented on the stagnation.
“We are currently experiencing a no-hire, no-fire environment,” Tomic explained. “There is less turnover than usual, and with layoffs, more experienced workers are now entering the job market, making competition stiffer for newly minted graduates.”
Impact of Government Funding Cuts
Patel’s desired field of public health has been particularly affected by government funding cuts. Last spring, the Department of Government Efficiency, led by Elon Musk, cut numerous programs aimed at reducing waste, including approximately $4 billion in research funding from the National Institutes of Health.
These cuts have prompted universities, such as Duke and Harvard, to impose hiring freezes. The ripple effects continue, as institutions like the University of Maryland and Princeton University have announced similar measures. As a result, unemployed workers with more experience are now competing for the same research roles sought by new graduates like Patel and her classmate Molly Howard.
“We’re not just competing with our peers but also with last year’s graduates and those who have lost jobs due to funding reductions,” Howard stated.
Job opportunities in public service, particularly think tanks, are also dwindling as federal government employment decreased by 9,000 jobs in April, totaling a decline of 348,000 since October 2024.
The Role of Artificial Intelligence
The rise of artificial intelligence poses additional challenges for early-career professionals. A report from the Stanford Digital Economy Lab revealed a 16% decrease in relative employment for entry-level jobs, including roles in software engineering and customer service. In contrast, demand for experienced workers remains stable.
“AI is disrupting the entry-level job market,” Tomic noted. “It complicates the situation for new candidates while simultaneously increasing the necessity for experienced workers.”
As AI continues to evolve, a Goldman Sachs survey suggests that an average of 16,000 jobs could be lost each month due to advancements in this technology.
Recent polling indicates a decline in enthusiasm for AI among Generation Z, with only 22% expressing excitement, a drop of 14% from the prior year. Stephanie Alston, CEO of BGG Enterprises, remarked on the increasing competition for entry-level positions.
“College graduates are now competing against not only their peers but also older generations who have been displaced by shifts in employment dynamics,” Alston said.
The job application process itself is increasingly influenced by AI, complicating matters further. KPMG estimates that by 2028, one in four job applicants will be fictitious, intensifying the challenges for real applicants.
Vivica D’Souza, a recent graduate with a master’s degree in media innovation, reported low response rates to her applications.
“I applied to 60 roles last month, and my response rate is only about 10 to 12 percent, which is frustrating,” she stated.
Courtney Gladney, a business administration graduate from LeMoyne-Owen College, noted that he encountered AI recruiters during the interview process, expressing a preference for human interaction.
“Sometimes I think it’s detrimental, as I need someone in the interview to assess me beyond what an algorithm can gauge.”
Historical Context and Future Outlook
This difficult employment landscape is not unprecedented. Graduates faced similar challenges during the Great Recession and onset of the COVID-19 pandemic. However, Tomic highlighted notable distinctions in the present economy.
“Current economic disruptions affect different demographics in varying degrees,” he said. “AI has specifically put pressure on less experienced roles while increasing demand for those with experience.”
While the current unemployment rate for recent college graduates stands at 5.6%, it remains higher than the general population’s 4.2% rate. Additionally, the underemployment rate among recent graduates remains relatively unchanged, at 41%.
Christopher Davis, president of LeMoyne-Owen College, emphasized the cyclical nature of the economy and urged students to adapt by developing soft skills.
“It’s crucial to convey to students that this isn’t a novel experience. There are ups and downs within the economic cycle,” Davis remarked, adding that while AI and political uncertainties pose challenges, strong networking and interpersonal skills remain valuable in the job market.
