For the Class of 2025, entering the workforce presents a unique and daunting challenge: securing employment in a job market characterized by a "no-hire, no-fire" mentality. Despite the overall resilience of the US job market, with an unemployment rate of just 4.2% and a streak of 52 consecutive months of job growth, recent graduates are finding it increasingly difficult to land their first jobs. This situation is particularly concerning as it marks the worst job market for new college graduates since the peak of the Covid-19 pandemic.

The Current State of the Job Market

On the surface, the US job market appears robust. The national unemployment rate stands at 4.2%, and the economy has added jobs for 52 consecutive months, the second-longest streak of uninterrupted job growth in US history. However, beneath these positive indicators, there are signs of trouble, especially for new college graduates.

Business decision-making has been paralyzed by the chaotic trade war, high interest rates, and the looming threat of artificial intelligence (AI) displacing jobs. Entry-level hiring is down significantly, with LinkedIn reporting a 23% decline compared to March 2020, exceeding the 18% decline in overall hiring over the same period. The number of people collecting unemployment checks reached a four-year high in mid-May, indicating that it is taking longer for job seekers to find employment.

The Struggle for Recent Graduates

For recent graduates, the job market is particularly challenging. For the first time since record-keeping began in 1980, the unemployment rate for recent graduates (those aged 22 to 27 with a bachelor’s degree or higher) is consistently higher than the national unemployment rate, according to Oxford Economics. Since mid-2023, the unemployment rate for recent college graduates has climbed by 1.6 percentage points—triple the national increase. The unemployment rate for those aged 20 to 24 is nearly twice as high as the national average at 8.2%, with young men facing an even higher rate of 9.6%.

This situation is taking a toll on new graduates, many of whom are saddled with significant student debt. Jenna Macksoud, a 23-year-old graduate of American University, spent over a year applying to multiple jobs daily, often receiving no response from prospective employers. "It felt hopeless," she said. Eventually, she widened her search and landed a job in business development for an IT and cybersecurity company. Her advice to current graduates is to stay persistent and view the job search as a numbers game.

The Impact of AI on the Job Market

The rapid advancement of AI technology adds another layer of complexity to the job market. Dario Amodei, CEO of AI giant Anthropic, warns that AI could eliminate half of all entry-level white-collar jobs and push unemployment rates to between 10% and 20% within the next one to five years. Oxford Economics notes that employment in computer science and mathematics—industries particularly vulnerable to AI disruption—has declined by 8% since 2022 for those aged 22 to 27. In contrast, the employment rate for those older than 27 in these industries has remained relatively stable.

However, some experts argue that the fears around AI are overblown. Kory Kantenga, head of economics at LinkedIn, suggests that while technology has always disrupted jobs, the workforce has historically adapted. He points to the example of ATMs, which did not eliminate bank teller jobs but instead led to a shift in job roles. Kantenga emphasizes that the rewards of a college degree still outweigh the costs, as degree holders generally have higher earnings potential and lower unemployment rates.

The Broader Implications for the Workforce

The challenging job market for recent graduates highlights the broader debate over the value of a college degree. With tuition costs soaring and student debt piling up, many students are questioning whether a degree is worth the investment. Federal data shows that the unemployment rate for young workers with a bachelor’s degree or higher is lower than for those without one, though the gap has narrowed in recent years.

Economists suggest that the onus is on college students to choose their fields of study wisely, focusing on faster-growing sectors such as healthcare and education. "Know where the momentum is and think about not just your first job, but your next step," advises Kantenga. The goal is to ensure that students are not only employable but also have a clear path for career advancement.

The Human Toll of a Stagnant Job Market

The struggle to find employment is not just an economic issue; it also has a significant human impact. Parents, who often encourage their children to pursue higher education, are frustrated by the lack of job opportunities. Rob Bastress, whose son graduated from the University of California Irvine in December 2023, expressed his disappointment. "You’re pressuring your kids to get good grades, get into a good school to set them up for the right opportunities when they get out. And now those opportunities have kind of vanished."

For young graduates like Gabriel Nash, the situation is equally challenging. Nash, a 24-year-old from Orlando, Florida, has applied to over 450 jobs in communications and video editing since graduating from the University of Central Florida in May 2024. Despite his efforts, he has yet to secure a full-time position and currently works part-time as a content creator on YouTube. "It’s stressful," he said. "There is this social pressure of needing to get out and get a job. But if nobody is hiring, what am I supposed to do?"

Adapting to a Changing Landscape

The job market for the Class of 2025 is fraught with challenges, from a no-hire, no-fire mentality to the looming threat of AI displacement. While the overall job market remains resilient, recent graduates face significant hurdles in securing employment. The situation underscores the need for adaptability and strategic planning, both from job seekers and policymakers.

For graduates, persistence and a strategic approach to job searching are crucial. For policymakers, addressing the root causes of the job market stagnation—such as the trade war, high interest rates, and AI disruption—will be essential in creating a more dynamic and inclusive labor market. As the workforce continues to evolve, the ability to navigate these changes will be key to ensuring that the next generation of workers can thrive in an increasingly complex economic landscape.