For the graduating Class of 2025, entering the workforce has become an unexpectedly uphill battle. Despite a resilient U.S. economy and historically low national unemployment, new college grads are facing the worst hiring landscape since the early days of the COVID-19 pandemic.

An Economy That’s Growing — But Not Hiring Grads

The overall labor market appears stable on the surface. The U.S. unemployment rate stands at 4.2%, and the economy has added jobs for 52 consecutive months — the second-longest streak on record.

But beneath the surface, cracks are forming.

Businesses are hesitant to hire due to global trade tensions and rising interest rates. Entry-level hiring is down sharply — 23% lower than it was in March 2020, according to LinkedIn — and young workers are feeling the impact.

For the first time since 1980, the jobless rate for recent college graduates (ages 22 to 27) is consistently higher than the national average, according to Oxford Economics. And for men in this group, the situation is even worse: nearly 1 in 10 are unemployed, up from 6.7% a year ago.

“It’s a very difficult jobs market for college graduates,” said Matthew Martin, senior U.S. economist at Oxford Economics. “And it will take time to work out of this.”

Young Grads Left Waiting

Recent graduates are finding that the hiring process can drag on for months, with long periods of silence and few interview callbacks. This delay leaves many young people not only jobless, but also burdened with mounting student loan debt.

Jenna Macksoud, 23, applied to hundreds of positions after graduating from American University in late 2023. “It felt hopeless,” she said. With $70,000 in student debt and few leads in the public sector, she eventually found work in IT sales — a role outside her initial career goals.

Her advice to others: “It’s a numbers game. Stay persistent.”

But the struggle isn’t just individual — it’s generational. Worker confidence among Gen Z has recently plunged to record lows, even below early-pandemic levels, LinkedIn reports.

Is AI Already Replacing Entry-Level Workers?

One factor making the job hunt even more daunting is the rapid rise of artificial intelligence.

AI experts like Dario Amodei, CEO of AI firm Anthropic, warn that advanced models could eliminate up to half of all entry-level white-collar jobs within five years. He told CNN, “We have to act now. We can’t just sleepwalk into it.”

Oxford Economics has already observed an 8% decline in employment among 22–27-year-olds in AI-vulnerable fields like computer science and mathematics. For older workers in the same sectors, job levels have remained relatively steady — raising concerns about generational displacement.

Still, some economists believe these fears may be overblown.

“There’s no clear evidence that AI is directly causing the hiring slowdown,” said LinkedIn’s chief economist, Kory Kantenga. “Technology changes the job landscape, but history shows people adapt — like when ATMs didn’t replace all bank tellers.”

The High Cost of Higher Education

As job prospects wane, scrutiny of the value of a college degree is intensifying.

While college grads still tend to earn more and face lower unemployment than non-degree holders, the gap is narrowing. Meanwhile, the cost of a degree — often over six figures — is becoming harder to justify for many students.

Still, Kantenga maintains that higher education remains a smart long-term investment: “At the end of the day, the rewards of a degree still dwarf the costs.”

However, he cautions students to choose their fields wisely. “Focus on sectors with momentum, like healthcare or education,” he said. “And think about your second job, not just the first.”

Real Struggles, Real Stories

The economic stress isn’t just hitting graduates — it’s affecting families.

“It’s frustrating,” said Rob Bastress, whose son graduated from UC Irvine in 2023 but remains unemployed. “We told our kids to work hard, go to a good school — and now the opportunities just aren’t there.”

Some, like Gabriel Nash from Orlando, are scraping by with part-time work while applying to hundreds of jobs. A 2024 graduate with a degree in communications, Nash has submitted about 450 applications — with no success.

He now creates gaming content on YouTube to earn a modest income. “It’s stressful,” he said. “I want to move out, get on with life — but if no one’s hiring, what am I supposed to do?”

Bottom Line

The Class of 2025 is entering a uniquely challenging job market shaped by economic uncertainty, shifting hiring priorities, and the disruptive potential of AI. While a degree still offers long-term benefits, today’s grads are finding that a diploma alone is no longer a guaranteed path to success.

To adapt, experts urge students and job seekers to remain persistent, flexible, and forward-thinking — not just about their first job, but about building a sustainable and adaptable career.