The job market slowdown is hitting recent college grads hard

With a Georgetown degree and several internships under her belt, Christina Salvadore thought she’d be starting a career in New York City’s fashion or beauty industries around now. The problem: She can’t find a job.

The 23-year-old hasn’t been able to land a full-time role despite filling out hundreds of applications and taking dozens of networking calls since graduating in the spring. She’s currently applying to part-time gigs to tide her over financially.

“It definitely sucks when people are like, ‘So what are you doing now?,'” Salvadore, a Florida native, told CNBC. “I’m sitting in my parents’ house on LinkedIn 24 hours a day.”

A growing body of data shows Salvadore isn’t alone. Young college grads are having a uniquely difficult time trying to clinch their first full-time jobs and feeling the brunt of the weakening labor market.

On a macro level, this group’s tough luck is moving the needle in broader data sets that are used in part by economists and monetary policymakers to determine the health of the economy. For the hundreds of thousands of Americans in this camp, it’s altering their visions for what they thought this era of life would look like.

The unemployment rate for “new entrants,” a group that includes new college grads and others trying to break into the full-time workforce, hit a nine-year peak this year, federal data shows. The group’s share of the total unemployed population spiked to its highest percentage in decades.

Put simply: The U.S. has become “no country for young grads,” according to Gad Levanon, chief economist at Burning Glass Institute, and his team at the labor-focused think tank.

In a report published this summer, Levanon and his team found that the bachelor’s degree isn’t delivering on its “fundamental promise” of access to white-collar jobs for the first time in modern history. The once-lauded path from college campus to career, the team concluded, is increasingly less reliable.

After Levanon fielded questions about whether the trend was impacting all young workers or just those with college diplomas, he conducted further analysis of federal data. It shows 20- to 24-year-olds with bachelor’s degrees have seen the most extreme levels of unemployment compared with historical levels than other educational groups.

To be sure, bachelor’s degree holders in this age bracket have long benefited from a lower unemployment rate compared with those with just high school diplomas. But Levanon’s data shows the gap between the two groups is the smallest it has been since at least the early 2000s.

“You clearly see here something unusual for the bachelor’s degree,” Levanon told CNBC.

On popular social media platform TikTok, young adults fresh out of college have made the trials and tribulations associated with finding their first post-grad job a sort of subgenre. They’re documenting the journey and lamenting the discouragement they feel. They’re moving home with their parents. They’re questioning why entry-level job postings require several years of experience. They’re wondering if companies have to “ghost” them, meaning they never get a response to an application.

Several have used the slang phrase “crashing out” to describe how they’re faring emotionally.

“I feel like I’m behind right now,” said recent Boston College grad Michael Hartman, who recently sought insight from a psychic about his career trajectory after around 10 months of unsuccessful job hunting. Hartman has an economics degree and has been seeking a consulting or business strategy role.

This turn of fortune for America’s newest college grads has caught the attention of top economic policymakers and comes amid mounting concerns about the labor market at large.

Federal Reserve Chair Jerome Powell acknowledged a few weeks ago that young people are having a “harder time” locking down work. He pointed to a “low-firing, low-hiring environment,” a landscape that economists have said makes it particularly tough for those looking to break into the full-time workforce.

The number of workers getting hired and quitting slowed in August, according to government data released Tuesday. Figures from the Bureau of Labor Statistics released in September show the volume of people staying unemployed for at least 27 weeks has ballooned around 25% year over year on a seasonally adjusted basis. (Federal labor data previously expected to be released this week is on hold for the duration for the government shutdown.)

Burning Glass’ Levanon said the problem stems in part from the rising share of young Americans obtaining four-year degrees. The demand for workers with this education level isn’t keeping up, he said, meaning current conditions may not improve anytime soon.

This could result in a hit to college enrollment as young people realize higher education is not the career pipeline it once was, Levanon added.

On top of that, artificial intelligence’s rise has raised alarm that entry-level, knowledge-worker roles will be automated away.

In August, Stanford published a bombshell study finding U.S. workers aged 22 to 25 in jobs most exposed to AI have seen a 13% decline in employment since 2022. Anecdotally, executives at companies ranging from Walmart to Accenture have said the technology will drastically reshape their labor forces.

Tightening in the labor market has made an entire generation more worried about what the future will hold. Reported probability of losing a job over the next five years among 18- to 34-year-olds in May jumped to highs last seen in 2013, according to University of Michigan data.

These concerns have changed the outlook for recent and soon-to-be college grads alike. After seeing friends struggle to secure employment, Emma Zatkulak began firing off applications several weeks earlier than she previously anticipated. The 21-year-old finds herself scheduling interviews for sales and insurance roles in between a full class load and two jobs.

“It’s been very stressful,” said Zatkulak, who is in her final semester as a communications major at Boise State University in Idaho. “I have not felt calm in a couple months.”

However, not all new grads may be feeling this shift to the same extent.

On job board Indeed, software development job listings are at around 66% of the volume seen before the Covid pandemic. On the other hand, nursing position postings are up about 16% compared with the same baseline.

“It’s a real phenomenon,” said Laura Ullrich, Indeed’s director of economic research for North America. “But at the same time, I do not think it applies to all students or all young people. It depends on what sector they’re working in.”

Still, Ullrich acknowledged that there’s reason for young adults’ anxiety. She pointed to an analysis by Moody’s Analytics that found fewer tracked industries have added jobs over the last six months than removed them, which has historically only happened during and around recessions.

In the technology industry, the decline in entry-level hiring is particularly clear. The percentage of hires with little work experience has plunged more than 50% at large-cap tech companies between 2019 and 2024, according to venture capital firm SignalFire. At startups, that rate has dropped more than 47%.

Young job seekers told CNBC that the difficulty of finding a job has brought up feelings of social isolation and self-doubt. As rejections pile up, they said it can become hard not to take it personally.

Over recent months, Julia Vasedkova has watched fellow graduates from Tennessee’s Rhodes College start their new lives as young professionals. Meanwhile, Vasedkova has been in a state of self-described “limbo” with only a part-time job, despite sending off hundreds of applications. The English major has applied for teaching, publishing and social media positions.

The 24-year-old finds herself turning down invitations for social gatherings to conserve money for rent and other expenses. It’s also time that she could be spending trying to find the increasingly elusive post-grad job, anyway.

“It’s definitely exhausting. Some days, it feels like I have a full-time job just to apply for jobs,” Vasedkova said. “It just feels like I don’t really have a life outside of that.”