Hordes of fresh college graduates will soon take on a job market wrought with anxiety — whether due to artificial intelligence or dismal hiring rates — as their parents and social media feeds hover expectantly.
That can’t feel good.
Though the country’s labor picture has improved somewhat in recent months, with the unemployment rate hovering around a relatively low 4.3% despite little job growth, young people still undoubtedly have to fight for work. Junior-level job postings are down, those out of work are staying unemployed for longer, and even Federal Reserve Chair Jerome Powell recently acknowledged that people without a position “will have a hard time breaking in unless somebody quits their job,” which workers broadly aren’t doing.
Kelly Collins, executive director of the Rockwell Career Center at the University of Houston’s Bauer College of Business, said some members of the center’s employer advisory board have slashed entry-level hiring by 25% to 50% since 2023. Bosses were relying on past interns to fill open roles and taking fewer risks on brand-new faces.
“There are a lot of employed people who have gotten laid off,” Collins said. “Our graduates are competing with students who are out two to three years that have the experience and can start from Day One. So our students need to be building skills any which way they can.”
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And if a student hasn’t had an internship, but still has a good GPA? “It’s going to be tough, honestly, and I hate to say it,” Collins said. Her tip: Network heavily, and don’t count on flooding the zone with AI-heavy applications and cover letters.
“That efficiency is not translating to effectiveness in the job search,” she said.
Still, it’s not all bad news. The National Association of Colleges and Employers said in a recent report that workplaces plan to increase new-grad hiring by 5.6% this year while also bringing on nearly 4% more interns. Similarly, the Indeed Hiring Lab recently reported that while demand for interns fell to its lowest level since 2020 at the end of last year, it has since improved to near-2024 levels.
“Last year was one of the worst years for internship jobs,” Cory Stahle, an economist at the Indeed Hiring Lab, told Yahoo Finance. “So far, we’re off to a slightly better start this year.”
Do you have a story about navigating the job market? Reach out to Emma Ockerman here.
Those internships will be crucial for recent grads looking to gain a foothold in a labor market where entry-level roles are much more competitive. The Federal Reserve’s most recent Beige Book, for example, noted that in the New York area, AI had already “reduced demand for entry-level workers performing routine tasks,” though demand for certain employees with AI skills remained high. The think tank Center for an Urban Future also found that entry-level postings in New York City — long a destination for young workers to flock — fell by more than 37% between 2022 and 2024.
Amid all of this, college seniors are feeling more pessimistic about starting their careers, Handshake noted in a report this week, with full-time postings down 2% from last year on the job platform and 12% below pre-pandemic levels. AI was among the major sources of their anxiety, though students who actually used AI themselves were a bit more optimistic about the job market as employer demand for AI skills picks up.
“Handshake is not a believer of the fact that AI will displace or replace all entry-level roles,” said Christine Cruzvergara, chief education strategy officer at Handshake. “But we do believe it will redefine what those roles look like. And I think that is a reality. I also think the students who are accepting and contending with that reality faster are the ones who are then becoming more adaptable.”
Emma Ockerman is a reporter covering the economy and labor for Yahoo Finance. You can reach her at emma.ockerman@yahooinc.com.
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