Tough Job Market Posed for Recent College Grads Once More
This year's new college graduates are stepping into a fierce job market, struggling against the tide as the Trump administration tightens the noose on student loan repayment. As the world finds itself in a heated economic storm, the fresh faces entering the workforce are hit where they least expect it – left high and dry as they hunt for their first opportunity to make a splash.
The unemployment rate for recent graduates rose to 5.8% as of March 2025, according to the Federal Reserve Bank of New York – a steep increase from the 4.6% reported the previous year. This meteoric rise also came paired with an escalating share of new graduates working jobs that don't require their degrees. The underemployment rate hit 41.2% in March, up from 40.6% the previous month.
Economist Allison Shrivastava puts it bluntly: "Right now, things are pretty frozen. A lot of employers and job seekers are both kind of deer-in-headlights, not sure what to do."
Take Julia Abbott, graduating this month from James Madison University, for example. As a psychology major, she's applied to over 200 roles in social media and marketing, but has seen minimal interviews come her way. Shrivastava sees this lack of opportunity echoed in the internship market – a prospective omnipotent gauge of a new graduate's job prospects. Internship posting levels are lagging 11 percentage points behind those reported in 2024.
The U.S. economy saw better-than-expected job growth in April, adding 177,000 jobs. However, analysts are sounding the alarm, as warning signs fill the horizon. Slowing average pay growth and extended periods of job insecurity for workers indicate that the cloudy job landscape is no aberration.
As Chief Executive Officer of Fitch Ratings, Olu Sonola, said, "the outlook remains very uncertain." This murky forecast coincides with broader economic turbulence fueled by Trump’s ongoing trade policies and tariffs. Major companies have warned about the effects of tariffs, with many households tightening their belts in response. Consumer outlooks have plunged to a 13-year low, forcing shoppers and businesses to make purchases before tariffs jack up the costs of everything from cars to frozen fish to fireworks.
Employers have curbed their entry-level hiring plans, trimming recruitment efforts over the past six months, according to a survey by the National Association of Colleges and Employers. The share of respondents planning to expand entry-level hiring dipped to 24.6% this spring, down from 27% last fall and the lowest rate since the trenches of the pandemic.
The Class of '25 is showing resilience in the face of adversity, adjusting their expectations to the tightening job market. Over half have abandoned their dreams of landing the "dream job," and 56% voiced pessimism about launching their careers in this climate. Low morale is especially strong within the computer science field, with over a quarter of seniors with that major voicing extreme pessimism about finding work post-graduation.
Anxiety around the job market is common among college students, but the Class of '25 faces an unprecedented amount of uncertainty. "I can't celebrate my past four years," said Abbott. "It just feels really scary, like walking into this world and not having something set out for me."
Enrichment:
While these findings don’t provide direct unemployment rates for specific college graduating classes, we can analyze overall labor market trends:
- As of March 2025, China's 16-24 age group urban unemployment reached 16.5%, under revised methodology excluding students.
- The U.S. technology sector shows tight conditions, with a 4.2% unemployment rate as of March 2025.
- No direct metrics are available in these sources, but the OECD reports stable employment rates for 25-54-year-olds as of late 2024. This implies potential underemployment pressure on younger cohorts not fully captured here.
- The Class of '25 graduates are entering a difficult job market, with the Trump administration tightening the noose on student loan repayment, leaving them struggling to find their first job.
- The unemployment rate for recent graduates has risen to 5.8%, and the underemployment rate has hit 41.2%, according to the Federal Reserve Bank of New York.
- Economist Allison Shrivastava describes the job market as "frozen," with employers and job seekers both uncertain about what to do.
- Julia Abbott, a psychology major graduating this month from James Madison University, has applied to over 200 roles in social media and marketing with minimal success.
- Internship posting levels are lagging 11 percentage points behind those reported in 2024, indicating a troubled internship market.
- The U.S. economy saw job growth in April, but analysts are sounding the alarm due to slowing average pay growth and extended periods of job insecurity.
- Olu Sonola, Chief Executive Officer of Fitch Ratings, calls the overall outlook "uncertain," due to Trump’s ongoing trade policies and tariffs.
- Major companies have warned about the effects of tariffs, and citizen outlooks have plunged to a 13-year low, forcing people to make purchases before costs increase.
- Employers have trimmed their entry-level hiring plans, with only 24.6% planning to expand entry-level hiring this spring, the lowest rate since the pandemic.
- The Class of '25 graduates are showing resilience but are adjusting their expectations to the tightening job market, with over half abandoning their dreams of landing their "dream job."
- The enrichment section suggests that China's 16-24 age group urban unemployment reached 16.5%, and the technology sector in the U.S. shows tight conditions, while the OECD reports stable employment rates for 25-54-year-olds, hinting at potential underemployment pressure on younger cohorts not fully captured in these statistics.
