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Why Is the US Job Market So Tough, Especially for Recent College Grads? (msn.com) 92

What's going on with the U.S. job market? "The economy is growing. Unemployment is low," notes the Washington Post. "And yet, for millions of workers, finding a job has become harder than at almost any other point in decades," with the hiring rate "well below pre-pandemic levels for more than a year."

Part of the problem? "Of the net 369,000 positions added across the entire economy since the start of 2025, health care alone accounted for nearly 800,000 — meaning every other sector, taken together, shed jobs." By the end of 2025 nearly half of college graduates ages 22 to 27 were working at jobs that didn't require a degree, according to stats from New York's Federal Reserve Bank. The headline unemployment rate, at 4.2%, looks healthy. But that figure has been buoyed by a shrinking labor force: Fewer people are actively looking for work, which keeps the rate down even as hiring slows...

[Some large tech companies] are trying to recalibrate after their hiring sprees of 2021 and 2022, when many had raised pay, offered flexible schedules and signed people quickly... Higher interest rates have also made expansion more expensive, pushing many firms to invest in technology rather than headcount. Another reason hiring has slowed is uncertainty about AI. Even though the technology has not yet replaced large numbers of workers, it is already shaping how companies think about hiring. "I don't think this is AI displacement," said Ben Zweig, chief executive of Revelio Labs, a workforce data company. "What we're seeing is anticipatory." Instead of rushing to bring on new workers, some firms are waiting to see how the technology evolves and which tasks it will eventually take over.

A 39-year-old web developer tells the Post it took 453 job applications to get a handful of interviews and two offers. And a journalism school graduate said they'd sent hundreds of job applications but most led nowhere, and they're now couch-surfing to save money.

But the problem seems even worse for young people. One 18-year-old told the Post that in a year and a half of job searching, they'd yet to even meet an employer in person. The unemployment rate for people ages 22 to 27 who recently completed college hit 5.6% in the final months of 2025 — well above the 4.2% rate for all workers, according to national data from the Federal Reserve Bank of New York... At one point last summer, new workforce entrants made up a larger share of the unemployed than at any point since the late 1980s — higher even than during the Great Recession. When hiring slows, the door closes first on those without an existing foothold. For the class of 2026, the timing could hardly be worse.

"It is getting increasingly clear that young people are being more affected by AI than older workers," Zweig said. Companies are not eliminating jobs at scale, but many are slow to hire junior workers. At the same time, older workers are staying in the labor force longer, leaving fewer openings for new arrivals. Even when jobs are available, the bar has shifted. Positions once considered entry level now often require several years of experience, technical expertise and familiarity with AI tools. With fewer openings and more applicants, companies are holding out for candidates who can do the job immediately and need little training... Employers are also looking for a different mix of skills. An analysis of millions of job postings by Indeed found that communication skills now appear in nearly 42% of all listings, while leadership skills feature in nearly a third — capabilities that are harder to prove on a résumé and harder still to demonstrate without an existing professional network. Christine Beck, a career coach who works with early-career job seekers, said employers are asking more of the people they do hire.

Why Is the US Job Market So Tough, Especially for Recent College Grads?

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  • by Anonymous Coward

    Almost like firing the people who report important statistics gives odd effects.

    • As with my sig: "The biggest challenge of the 21st century is the irony of technologies of abundance in the hands of those still thinking in terms of scarcity."

      • by Paul Fernhout ( 109597 ) on Saturday May 16, 2026 @11:31AM (#66146215) Homepage

        Of course, there is a more local-to-the-USA part of the jobs story too (even as it is not as big a global issue as the one in my sig):
        "Americans Don't Realize The Empire Is Already Falling Apart"
        https://www.youtube.com/watch?... [youtube.com]
        "Spain. Britain. The Soviet Union. Three of history's most powerful empires all destroyed by the same 7-stage pattern. Military overextension. Currency debasement. Debt spiral. Loss of productive capacity. Social decay. Reserve currency collapse. Sudden fall.
        Historians and economists have identified this sequence repeating across centuries with alarming consistency. And in 2026, the United States shows every measurable sign of Stage 5 right now.
        In this video, we break down:
        * Why America's $36 trillion debt is past the point of no return;
        * How the U.S. lost its productive economy and replaced it with a financial casino;
        * Why the dollar's share of global reserves has dropped 12 points since 2000;
        * The consumer sentiment reading lower than ANY war, recession, or pandemic in 75 years;
        * What China, BRICS, and the Global South are quietly doing about it;
        This isn't politics. This isn't conspiracy. This is arithmetic."

        Personally I don't feel the USA debt is "past the point of no return" theoretically even if it might be politically/practically. Restore tax rates from the 1970s, remove the cap on Social Security earnings tax but cap payouts at current max levels, and add a 0.1% tax on every stock sale -- and the US debt will be quickly reduced (plus there will be plenty of money for medicare-for-all, keeping Social Security solvent, and reinvesting in physical and social infrastructure). A day of legislative voting in Congress plus a quick signature by the president, and the USA would be on a sound economic footing again.

        Whether there is the political will to do all that is a different story. It would require the GOP to move past the "Two Santa Clauses tactic" for winning elections:
        https://www.salon.com/2018/02/... [salon.com]
        "In fact, Republican strategist Jude Wanniski's 1974 "Two Santa Clauses Theory" has been the main reason why the GOP has succeeded in producing our last two Republican presidents, Bush and Trump (despite losing the popular vote both times). It's also why Reagan's economy seemed to be "good."
        Here's how it works, laid it out in simple summary:
        First, when Republicans control the federal government, and particularly the White House, spend money like a drunken sailor and run up the US debt as far and as fast as possible. This produces three results - it stimulates the economy thus making people think that the GOP can produce a good economy, it raises the debt dramatically, and it makes people think that Republicans are the "tax-cut Santa Claus."
        Second, when a Democrat is in the White House, scream about the national debt as loudly and frantically as possible, freaking out about how "our children will have to pay for it!" and "we have to cut spending to solve the crisis!" This will force the Democrats in power to cut their own social safety net programs, thus shooting their welfare-of-the-American-people Santa Claus. ..."

        Like with modern monetary theory, governments who have a dominant world currently like the USA essentially print whatever money they want to pay their bills -- and they then can use taxes to manage the size of the available money supply to manage inflation. It's so weird that people (the Fed especially) act like the only way to reduce i

        • Most likely we're gonna inflate our way out of the debt. 6-7% for a few years will make the deficit much smaller in real terms. Highly recommend leveraging in ETFs to ride that wave. The reason why is quite simple. Inflation is a tax on the poor without having to increase any actual taxes on paper.

        • ... to cut their own social safety net programs ...

          The Democratic Party helped billionaires by repeatedly hiding the fact that the GOP's tax-cuts for billionaires were funded by destroying social safety nets, thereby shifting the cost of de-funding government from the wealthy to the poor. US congress has followed a "let them eat cake" policy for decades. As the post (by _0x0nyadesu) following this, reveals, shifting the cost to poor people is standard practice.

          Reagan changed government policy from forced growth (imperialism/colonialism) to rich-people-w

  • by dbialac ( 320955 ) on Saturday May 16, 2026 @10:45AM (#66146135)
    The "growth" is about the jobs being held are low-wage low-class jobs, combined with Wall Street showing record profits in part because of that and in part because of offshoring. Meanwhile, middle class jobs are hard to come by.
    • The Gulf War 3.0 is causing gas and diesel to reach record highs. If you thought pandemic era price increases were bad just wait.

  • Kids these days? (Score:5, Interesting)

    by Fons_de_spons ( 1311177 ) on Saturday May 16, 2026 @10:47AM (#66146137)
    Talked with an old colleague. The company I worked 5 years ago is situated in the semiconductor industry. They are constantly growing. They need new staff all the time. The work is demanding, designing semiconductor circuits is a tough on math and pretty stressful as no mistakes are tolerated. The employer is relatively reasonable about it though.
    Desperate for fresh blood, they actively search for new employees. Last year, they apparently invited dozens of fresh graduates. None were remotely qualified. When I did the interview more than a decade ago, the questions they asked were ok. Basic transistor level stuff, show an analog circuit what does it do, calculate a few basic metrics, ...
    They decided to open small offices around the EU in the hope to catch employees with a good basic electronics foundation.
    This is just one story, but it matches the situation described above... Can't blame the kids though. In my days, the world was a lot smaller and more boring.
    • by Brain-Fu ( 1274756 ) on Saturday May 16, 2026 @11:07AM (#66146169) Homepage Journal

      I have seen something similar doing interviews to hire new software developers before and during the pandemic. Some of the applicants had very high GPA but still couldn't solve relatively simple problems. They could answer questions about coding and algorithms make easy modifications to existing code, and they could even write new code so long as it was at "script kiddy" level of difficulty. But they couldn't think through a novel problem (even problems that don't require specialized API knowledge or advanced math or anything like that).

      My belief is that, at that time, software engineering was being billed out as a lucrative career and there was a lot of "push" from the industry to get more kids interested. So colleges dumbed down the curriculum and just lowered the bar all-around, to scoop up all that student loan money. And the result was a whole generation of debt-ridden young adults with degrees but no skills.

      If the situation is still like that, I can see why nobody wants to hire these kids. I wouldn't know, since my employer hasn't hired anyone since the pandemic either. And with the possibility that the existing team can use AI to be just as effective without hiring those kids, nobody wants to do it. Not, at least, until something forces their hand.

      • Re:Kids these days? (Score:5, Interesting)

        by Anonymous Coward on Saturday May 16, 2026 @11:34AM (#66146221)

        (Posting as AC for obvious reasons.)

        I work in a state school and this is exactly what happened. I started to see it about 10 years ago. The world was in a "we need all the software engineer we can get" vibe. Almost everyone going this route would be making $100k or more a year. The university were not able to train enough people that bootcamps were rising teaching someone a little bit of webdev and they were getting jobs.

        The universities in the US being essentially paid per student graduated (as opposed to educated) opened the flood gate. Essentially driving as many students in as possible. The message from the administrations was "we don't need to graduate great students, we need to graduate as many good enough students as we can". Faculty who tried to hold the lines were side lined and replaced by on-contract faculty who would push the numbers up. Then covid happened which enabled a new wave of "we are all online, we don't even know how to do assessment anymore, let it go."

        So you get a bunch of people who do't care about the field and only go there because there is money. (Which I don't think is really a problem.) And institution who are barely trying to educate them and let most of them through.

        Now I am not saying that every graduate is bad. We have very strong students graduating. But in percentage, you can no longer assume that because someone graduate from where I am that are any good. In the past, it was probably something like a third are really good, a third are OK, a third are questionable, a handful are bad. Nowadays, I would think it is more like 10% are really good, 15% are OK, 25% are questionable, 20% are bad, 30% are in the "what the hell are we talking about" category.

        • Grade inflation (degree inflation) has been a well-known problem going back at least to the Vietnam War. Professors who were there tell me that since dropping out could very well be a death sentence in a foreign jungle, they were not inclined to push students out.

          Besides the particular forces that inflate "STEM" grades, there are also more general trends at work across all fields.

        • by Anonymous Coward

          Your English needs work. The errors make it obvious that you are not a native speaker -and likely a foreign troll.

        • by kackle ( 910159 )
          Worse, the grade school teachers in my family told me that they weren't allowed to hold any students back during the pandemic--it was automatic graduation the next grade.
      • So you don't typically teach that kind of basic problem solving in schools you're teaching fundamentals.

        Those kind of basic problems solving skills get picked up very quickly but you're still going to have to train them and that's usually 6 months to a year.

        You have probably gotten used to cheap Indian labor giving you access to a quality of software engineer you couldn't normally afford. Somebody who has the experience without needing that initial ramp up. The problem is that cheap labor and the g
      • In my opinion, interviews are becoming more and more absurd, and less and less relevant to the work.

      • In 2018 or 2019, I was working in embedded software development despite not formally studying CS (electrical engineer with some coding experience, mostly numerical stuff). My coworker was interviewing new hires and complained that none of them could answer challenge questions that he thought were fair and not too hard. He had me work through the question set, and I think he was right.

        My current manager says some kids just out of school are fairly obviously using AI during the interview. They don't get hi

    • What does this semiconductor designer job pay?

    • Re: (Score:2, Troll)

      by hdyoung ( 5182939 )
      Analog circuitry beyond an RLC loop? Actual individual transistor understanding?

      Nowadays, about the only people who learn that stuff consistently are physicists. With a few exceptions, even most EEs are 99% digital now. Whatever analog most EEs learn in their single advanced analog class is quickly forgotten and swamped by the digital stuff.

      Also, are you absolutely sure that your view of the industry is correct? In my experience, most of the time, when a business says “we can’t find qual
      • You wrote: "In my experience, most of the time, when a business says "we can't find qualified applicants" what they really mean is "we can't find *perfect* employees to hire, or the truth is we just don't want to hire at all right now"."

        Two other interconnected things most such businesses may mean but are not saying out loud (related to your "perfect" point) are:
        * we are not willing to pay enough for experienced talent (especially if we might be able to bring in H-1Bs or alternatively American W2s via big c

      • RLC loop? They teach that in high school here. Pretty sure analog transistor level is still taught. It is not for the faint of hart though. We did a few things for EVs. Lot of digital there, but power electronics is more than stuffing gates on a rail.
        Yes, they really want people. No they do not want the perfect guys. Fresh from school? No problem. No master degree but experience? Welcome! Trouble with basic understanding of analog electronics? Nope. Hiring that guy would do more damage than good. They trie
    • Because you treat them like shit and burn them out.

      There are only a handful of people who can work for the low pay you are offering at the intensely high workload.

      You're looking for people to abuse and exploit. What's more you're looking for people who have a lot of education and skill that you want to abuse and exploit.

      You might get them for a little bit and get a little bit of abuse out of them and therefore profit but they're going to move on pretty quickly.

      And here is where you regale me
  • by jacks smirking reven ( 909048 ) on Saturday May 16, 2026 @10:51AM (#66146151)

    "Turning a big dial that says "cut labor" and looking back at the audience of shareholders for approval"

    • Yep. It's all about wage suppression and destroying the last vestiges of lucrative, upward mobility for high-skilled work that takes years of education and $100k's in debt. The answer is to go back to FDR relative progressive tax brackets for corporate, income, estate, and capital gains to incentivize paying workers proper wages. There can be no middle class without heavy taxation of extreme income.
    • by tlhIngan ( 30335 )

      It's because of greed, plain and simple. Started in the Reagan era where everyone got gaslit into believing trickle down economics works. Where companies decided to cut today so the CEO gets golden parachute tomorrow.

      The problem is, tomorrow is already here.

      Youth unemployment is an issue because AI is doing a good job at faking it. If this trend continues, 5 years from now there'll be a pipeline shortage because few entry level people were hired to become the middle experienced worker.

      But we can't shove the

  • by ctilsie242 ( 4841247 ) on Saturday May 16, 2026 @10:54AM (#66146155)

    It is fairly obvious. Everyone got ran out of the tech field who wasn't a senior tier, had close ties with management, or both. Not many people want to go into STEM in the US, because they know that they go and do the work, do the hard math courses, only to be muscled out of any chance at a job come graduation by cheap foreign labor. Not just our usual dear H1Bs, but B1s and numerous visas.

    College, in every other nation, is something the government pays for. The classmate I had from Chile? Government paid his way. Germany? Free courtesy of the Fatherland. China? Paid for. It is only Americans who have to mortgage their entire future to even have a chance at competing... and the US is the only country in the world that has student loans non-dischargable, and stay for life.

    Then there are job guarantees. The guy from China I went to class with is a chief engineer now. The German guy? Doing interesting stuff in physics. The French guy? He does film effects because France values their local culture. The Chile guy? Chemical engineer. For me, when I graduated, were it not for word of mouth and previous people I worked with, I'd have a choice between no job, or maybe enlist in the armed services, as the degree would give 1-2 ranks.

    • by Anonymous Coward on Saturday May 16, 2026 @11:08AM (#66146173)
      Chinese university isn't free. And they have 20% youth unemployment...
    • Cutting down the entry level computer jobs, lowering wages, and driving new and future graduates out of the field will turn Computer Science jobs into a unviable college degree.

      A better question to ask is: What college degrees given a $100.000 4 year degree cost can generate enough income to payback the college degree cost in 6 years after costs for a basic OK apartment, small car, budget food, taxes and utilities are taken out?

      A solution to this is to limit importing workers on a H1B or other visa basis fo

      • The US is totally stupid. College degrees should be free because they create tons more in payroll taxes that they cost. Making Americans pay higher college tuition prices, higher medical prices, and higher medication prices is extractive, predatory, and counterproductive.
        • by kackle ( 910159 )
          Yes, we are stupid, but not for that reason. Colleges vary widely here. Degrees vary widely here. Since we are a mix of the best and worst of the world, student abilities vary widely. Student desires vary widely. How do we sort all of that out financially? And I even say this as someone who left college originally due to lack of funds.

          Officially, we are deeply in debt; how do we pay for this when our non-students are already suffering in various ways? Isn't an influx of cash into an area such as e
  • by Tony Isaac ( 1301187 ) on Saturday May 16, 2026 @11:09AM (#66146177) Homepage

    By the end of 2025 nearly half of college graduates ages 22 to 27 were working at jobs that didn't require a degree, according to stats from New York's Federal Reserve Bank

    Here's a link to the NY Fed statistics on underemployment for recent college grads: https://www.newyorkfed.org/res... [newyorkfed.org]

    What the chart actually shows is that "nearly half" actually means 41.5%. OK, kind of close to half, I guess.
    BUT what's even more striking, looking at their numbers, is that this number is lower than peaks in 2012 (47.4%) and 1992 (48.3%).
    In the last three years, there has been a small increase in this number, but certainly not dramatic, in the context of the last 40-ish years shown by the statistics.

    So are recent college graduates really struggling more than usual, to find jobs related to their major? The numbers don't seem to say so.

    • by Zagnar ( 722415 ) on Saturday May 16, 2026 @11:31AM (#66146217)

      I can't speak for the official numbers, but in 2016 I had a job in IT after one interview at the third place I applied, I was still in college.

      Now it's 2026, after thousands of job applications and three interviews, I'm working landscaping.

      Not complaining though, working outdoors is pretty nice.

      • I don't doubt you. Note that I did not say it's *easy* to get the job you want. Just that it's not, statistically speaking, harder than it's been in the last 40 years.

        I'm 59, way past the so-called tech age ceiling of 40. The market is pretty tough right now, but it probably depends on where you are. In Texas, I've applied to 150 or so jobs, and have landed interviews with three companies. That doesn't seem too unreasonable to me. I'm still employed in software development, making very decent money.

        So yes,

      • I had an IT job that was primarily outdoors a few years back, it was great. (For Covid reasons, the organization had moved many operations outdoors.) I don't expect to ever see anything like that again, but it's also the only job I've had that I would undoubtedly be fine with doing for the rest of my life.

        But as far as the job search, you're exactly right. My job searches in 2012 and 2018 went similarly, no problem to simply find a job. A good job, not so easy, but just finding something in IT that uses som

    • Go to college, bury yourself in debt, get a 4-year degree in A.I engineering or whatever, go an apply for an A.I engineering job, find out they want people with 20+ years experience in a 5+ year old field.
      When you apply for college, they should tattoo on your arm "a college degree does not mean you get a job", just to reinforce what should be obvious.

      Sure, in the link, that's graduates who are underemployed, which should show you how advantageous that college degree really is.
      https://www.cengagegroup.com/n. [cengagegroup.com]

      • You sound like someone who watches a lot of YouTube influencers.

        Go to college, bury yourself in debt, get a 4-year degree in A.I engineering or whatever, go an apply for an A.I engineering job, find out they want people with 20+ years experience in a 5+ year old field.

        While this might happen now and then, such stupid recruiting mistakes, there's something a lot of young folks don't realize. Companies will list everything including the kitchen sink , that they would *like* in a candidate. But they know that realistically, they'll only get someone with, maybe, 80%. If you've got 80% of the "required" qualifications, you should apply for that job anyway. You'll be in the top 20% of candidates who apply, and tha

    • Two thoughts on this:

      1. Garbage degrees. A lot of people get degrees in fields that are not directly applicable to their future employment. There are degrees for people who work for a living, and degrees for the idle rich who can afford to indulge their curiosity. A lot more people are indulging in degrees without a path to employment. Leading to:

      2. Degree inflation. It used to be that any degree showed a certain aptitude. When you were the only one with a degree applying for the job, having a degree

    • "not as bas as the worst peaks of the past 35 years" is not a rebuttal to "they are struggling". They could still be struggling, it's just not the hardest it's been.

      • New college grads have *always* struggled to find work in their field, except for a very small subset of majors.

        Did you look at the linked graph? This year's numbers are *below* average for the past 40 years, in terms of percentage of grads who are under-employed. So it's not even as hard now as it *usually* is.

  • by PPH ( 736903 ) on Saturday May 16, 2026 @11:37AM (#66146223)

    Maybe figure out what industry you'd like to work in. And then apply for a job there. Even if it's a shit job, they'll see your work ethic and if you're honest about using the entry job as a stepping stone, they'll help you move up.

    A bit different situation: When I graduated with an EE degree, I went into the utility business. One outfit had a probationary/training program where they would run engineering candidates through "shit jobs". They put me on a line crew for a while (no energized work). Sure. Give me the end of the cable and I'll drag ith through the ditch. At the end of the probation period, one of the foremen that I worked for commented that I was one of the few engineers willing to do that work. Most sat in their cars, reading the paper (now I'm surre that would be pecking on a phone). I was a shoo-in for practically any opening that came around.

    Oh, and I learned to climb. Trees, not poles. I may be crazy, but I'm not stupid. Being a lumberjack with 50,000 volts is work for other people.

    • Maybe figure out what industry you'd like to work in. And then apply for a job there. Even if it's a shit job, they'll see your work ethic and if you're honest about using the entry job as a stepping stone, they'll help you move up.

      This is comedy, right?

  • "It is getting increasingly clear that young people are being more affected by AI than older workers..."

    While it is true that young people are disproportionately affected, it is not at all certain that AI is the root of this problem.

    Other than a half-dozen tech-behemoth companies, the entire economy is in decline.

    AI is the excuse that executives like to give when they lay people off, but there's always an excuse, and the excuse is rarely a reflection of reality.

    • Yep. The reason is wage suppression. They want to steal even more from everyone else in the world and are fine with making millions more homeless. They've already stolen $79 trillion over the past 50 years or so out of the pockets of ordinary people. Workers need to unionize, quit megacorps, and form their own employee-owned co-op companies.
  • According to the NY Fed, as cited by the article, it's been tough for recent grads for the last 40-ish years.
    https://www.newyorkfed.org/res... [newyorkfed.org]

    In fact, underemployment for recent college grads in 2026, is lower than it was in 2012 and 1992, and is about average compared to what it's been for the entire time the statistics were collected by the Fed.

    Maybe grads these days are more surprised by reality, than grads of past decades?

    • by godrik ( 1287354 )

      Anecdotically, it seems harder to get jobs as fresh graduates now, at least in Computer Science.
      Been teaching undergrad and grad students for about 15 years. seniors used to send 15 applications and get 3 interviews. Nowadays, they send hundreds and might not get a single call back.

      If you look at the numbers you provided (thanks for that), the definition of recent graduates is "22 to 27 years old who hold college degrees". So maybe the first 3 month after graduation got much tougher, but within 5 years it e

      • It's true, in 2020-2022, the market was white-hot. It was drop dead simple to get a job, matching the pattern you cited. Right now, it's harder than usual, but not job-market-apocalypse hard. The contrast to the hot market we just came out of, exaggerates how bad the current market *feels*.

  • A handful of anecdotes tells us nothing.

  • by Qbertino ( 265505 ) <moiraNO@SPAMmodparlor.com> on Saturday May 16, 2026 @01:44PM (#66146361)

    ... throughout the developed world. Especially for college grads. Same thing here in Germany too. The rate of unemployed academics has surpassed that of trades people, just like in the US. It's AI. Mostly.

    • Also, and nobody talks about this, the money printers keep running and printing more money, squeezing both individuals and companies, and there hasn't been enough technological progress to offset this new money
  • The stock market is up. The economy is struggling.

    Specific industries are hiring. Most businesses are shedding jobs.

    Not everything is fungible.

    • K-shaped recovery and E-shaped economy. The business mass media tries to gaslight the masses that everything is "fine" when it's AI spending, healthcare, and very rich who are spending while everyone else is in pain.
  • Grads still think they can get hired with starting salary of $80-100k, but are lucky to get $50k and not in their field !

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