College Graduates Are Feeling Pessimistic About the Job Market. Here's Why

Newsweek

07-05-2025

Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources.
Hope springs eternal—except for many college graduates prepping to enter an unsteady job market rife with contradictions. Hailey Washington, a senior majoring in marketing at Drexel University in Philadelphia, isn't bullish about her job prospects despite stellar undergraduate performance and indispensable industry experience from an internship at a luxury fashion brand.
"I would like to be optimistic but, based on the current job market, I feel pessimistic," Washington, 21, told Newsweek. "Most of my friends and myself do not have jobs lined up after graduation and are not getting interviews. We're all currently seeking part-time positions to build our resumes and to make some money as we search for full-time positions."
Newsweek Illustration
Washington, whose job hunt began in Philadelphia and has expanded into New York City and beyond, realizes she must remain nimble to navigate a turbulent economy wracked by uncertainty due to widespread cuts at government agencies, President Donald Trump's flurry of tariffs and freezes in federal funding for higher education.
While unemployment remains relatively low and key sectors like health care and technology foresee looming labor shortages, the specter of increased economic volatility obscures the future for many new graduates like Washington.
The jobless rate for workers aged 16 to 24 currently hovers below 10 percent, well above the national average of 4.2 percent, as the ascent of automation, global competition and overall economic upheaval have created a potent mix of trepidation and hope within the Class of 2025, often prompting a simple yet existential question: What happens now?
Profile shot of Hailey Washington
Profile shot of Hailey Washington
Kerri Sage
For many new graduates, the college experience was entirely atypical—dominated by a pandemic that popularized hybrid learning and a rapidly changing economy that reshaped industries in just a few semesters. As millions of young candidates prepare to enter the workforce, many still face an evolving landscape adjusting to rapid technological shifts and fluctuating hiring trends.
Those with degrees in fields like data science, cybersecurity and artificial intelligence may find themselves with more immediate opportunities than their counterparts with backgrounds in humanities and social sciences, but the need to continuously adapt appears to be a prerequisite for most entry-level workers, experts told Newsweek.
Jobs Are Uncertain Due to 'Economic Chaos'
More than 200,000 federal employees, spanning environmental regulators to defense contractors, have been laid off this year amid steep reductions by the Trump administration and the Department of Government Efficiency. Billionaire Elon Musk, who has overseen the agency, has defended the cuts as necessary to curb government bloat, but the already competitive market is now being flooded by hundreds of thousands of new applicants—adding yet another layer of complexity for young job seekers who are increasingly concerned about their prospects. In a College Pulse/Newsweek poll from mid-April, 39 percent of students polled were somewhat or very unconfident about their ability to secure a job in their desired field after graduation, up from 33 percent in January.
The ensuing turmoil has seemingly ended the notion that a government job could be a relatively safe avenue, as hiring freezes and reductions continue. President Trump further exacerbated the muddy outlook for some grads by announcing sweeping tariffs against nearly all U.S. trading partners on April 2, triggering global economic tumult and huge stock market losses. The administration reversed course a week later, but Washington continues to target China with 145 percent tariffs, while Beijing has responded with levies on most U.S. imports of 125 percent.
Funding freezes at universities like Harvard may translate to fewer academic opportunities for graduates.
Funding freezes at universities like Harvard may translate to fewer academic opportunities for graduates.
Sophie Park/Getty
"College graduates this year are facing a very uncertain labor market," said Thomas Kochan, professor emeritus at the MIT Sloan School of Management. "With employers not clear on whether the economy is going to go into a recession, whether there's going to be more economic chaos in general, with layoffs of federal employees and maybe backlash from other decisions by the Trump administration, the uncertainty is going to create a softer labor market for college graduates this year than they've experienced in recent years."
The Trump administration is also targeting federal funding doled out to some elite higher education institutions, most notably taking aim at Harvard University by freezing more than $2.2 billion in grants and $60 million in contracts. The Treasury Department, meanwhile, has reportedly started the process of revoking the school's tax-exempt status.
Columbia University, where pro-Palestinian protests erupted last year, was the first college caught in Trump's crosshairs, with the cancellation of roughly $400 million in federal funding in early March for not addressing "persistent harassment of Jewish students," according to the administration. The school later announced several policy changes, including beefed-up enforcement of rules and hiring additional campus officers.
Protesters participate in a march and rally from City College to Columbia University on April 25, 2025 in New York City.
Protesters participate in a march and rally from City College to Columbia University on April 25, 2025 in New York City.
Spencer Platt/Getty
In addition to Harvard and Columbia, the administration has also paused hundreds of millions in federal funding for Brown, Cornell, Northwestern, Princeton and the University of Pennsylvania over alleged Title VI civil rights violations and ideological demands, especially related to DEI programs.
The $11 billion-plus of university research funding cuts overall is causing chaos across academia, with trimmed budgets, hiring freezes or reductions in Ph.D. admissions. More generally, the collective ongoing efforts by the Trump administration could equate to fewer opportunities for job seekers as employers become more hesitant to hire due to a lack of overall stability, veteran observers told Newsweek. That sobering assessment comes atop a slight uptick in unemployment among 16- to 24-year-old workers last year and fewer new job opportunities overall. But it is "not a grave situation" for most new grads, especially those skilled in data analytics, AI and related tools, Kochan of MIT said.
"They need to cast their net widely," he said. "They need to really emphasize the skills that they will bring to an organization that are in high demand today and how they will get started right on the first day."
Opportunities for job hunters are more robust in STEM fields like data analytics and engineering.
Opportunities for job hunters are more robust in STEM fields like data analytics and engineering.
Hill Street Studios/Getty
For Washington, the Drexel marketing major, the daunting task of landing her first post-undergrad job has been emphatically underwhelming thus far, the perennial dean's list standout said.
"I have not heard back from the places I have applied to, unfortunately," Washington told Newsweek. "Places are not even reaching out to say they will not move forward with your application. They are simply ghosting applicants, which makes me discouraged to apply to more jobs."
Washington, who graduates in June, aspires to work in sales or marketing for a major fashion brand and is hoping to build on her successful internship at Marchesa, a New York City-based luxury label. But designers like Louis Vuitton, Prada Group and Calvin Klein aren't ready to turn over their ensembles to the chic self-starter just yet, she said.
"There are not many people hiring in the current moment for fall 2025," Washington said, as she tries to plan for the future.
Attendees visit the FDNY recruiting table during a job fair at the YMCA Gerard Carter Center on March 27, 2025 in the Stapleton Heights neighborhood of the Staten Island borough in New York City.
Attendees visit the FDNY recruiting table during a job fair at the YMCA Gerard Carter Center on March 27, 2025 in the Stapleton Heights neighborhood of the Staten Island borough in New York City.
Michael M. Santiago/Getty
Washington considers fashion sales and marketing to be a "very saturated" industry in which the chances of landing an interview remains low—even for top candidates. The unpredictable path has prompted the budding fashionista to take a part-time sales gig at the retailer Rag & Bone in Philadelphia.
"This job will both help me financially and with my resume," Washington said. "But I plan to continue my search while working part-time."
Washington, who wants to avoid moving back home once her apartment lease expires in September, said she's concerned that federal layoffs, the ongoing trade war and university funding cuts are creating an even tougher climate for new grads.
"I believe the tariffs and federal layoffs have led to uncertainty for graduates," she said. "Tariffs will directly affect the fashion supply chain and will ultimately affect the fashion industry as a whole. I'm worried about job opportunities."
Some scholars told Newsweek they're relieved to have their next role in sight. Claire Downing, who graduates from Vanderbilt University in May, said she feels "quite fortunate" to have a job lined up as a student aviator in the U.S. Navy. The Montana native—who double majored in cognitive studies along with ecology, evolution and organismal biology—has been affiliated with Reserve Officers' Training Corps since high school, making her route decidedly clearer than some of her counterparts.
Profile shot of Claire Downing
Profile shot of Claire Downing
Kelly VanDyke
"I'll go to flight school and, provided I make it through, I'll be a pilot in the Navy," Downing said of the two-year program. "About half of my friends are split between having plans otherwise, whether that be grad school, medical school or a gap year, and the other half have jobs. A small section are currently searching, but I would say the majority have a job secured."
The youth unemployment rate stood at 9.6 percent as of April, down from 9.7 percent in February, but significantly higher than a recent low of 6.6 percent in April 2023, according to the Federal Reserve Bank of St. Louis. Overall unemployment in April, meanwhile, stayed stable at 4.2 percent, Bureau of Labor Statistics data shows.
Downing, 22, envisions becoming a fish and wildlife biologist following her naval career, but acknowledged that finding an entry-level role straight out of college would be difficult since most full-time positions require graduate degrees and the "shift away from natural resources and government jobs that support those" by the Trump administration.
"I don't think there would be many job opportunities," she said. "I know that seniority is really important in those jobs right now to even hold on to them. I would probably have to look for a job with a [nongovernmental organization] or something like that, but finding a very sustaining job could be potentially difficult."
Downing said she'd also be worried about overall stability as a federal worker given President Trump's evolving priorities and cost-cutting efforts by DOGE, which could reportedly affect at least 12 percent of 2.4 million civilian federal workers nationwide.
"You know, 'Write everything you've done in the past two weeks' kind of monitoring of the government positions," she said, referring to Musk's ultimatum to federal employees in late February. "I don't think job security is super high right now."
Upon completion of flight school, Downing must serve an additional eight years of active duty in the Navy, which she believes will be an asset once she pivots into the private sector in search of fish and wildlife biology positions.
"I was motivated to serve prior to becoming more interested in potentially pursuing a career in fish-wildlife biology, so job availability wasn't a factor in my decision," she said.
Why Some Students Are Striking Out Alone for a Job
Some students are taking a nontraditional path in these unsettled times. Jack Cocchiarella, who studied political science at Columbia University, plans to leave New York City following commencement to capitalize on his early success as a progressive political commentator. The 22-year-old Florida native, who has amassed more than 850,000 YouTube subscribers since July, said he's eager to move to Washington to fully "build out" his brand.
Like Downing, Cocchiarella said he "absolutely" considers himself lucky to have some sense of post-college clarity amid the unstable job market.
"It's been very successful, more so than I maybe could've thought," the young entrepreneur said. "I guess I caught it at the right time."
Headshot of Jack Cocchiarella
Headshot of Jack Cocchiarella
Jack Cocchiarella
Cocchiarella, who acknowledged taking "something outside the normal path," said some of his Columbia classmates and friends of friends received emails from private businesses and federal agencies in late January and early February informing them that previous offers of employment had been rescinded due to widespread uncertainty.
"You know, this is something that I cover every day," he said. "So, I feel a lot closer to it even if it's not directly impacting me because I'm self-employed."
Cocchiarella said the bulk of his peers consider this spring to be an unusually fraught time to enter the workforce. He characterized the collective sentiment as "terrible" and very concerned.
"They don't see a path forward, with what would be considered like, 'this is what you do, this is what we've been told to do' to get a good job and to build wealth or at least a life in which you're not living just paycheck to paycheck," Cocchiarella said.
Why Going to Grad School Appeals to Some
Eleanor Schoenbrun, another soon-to-be graduate, said her recent assessment of the job market influenced her pursuit of a master's degree after majoring in global affairs and political science at Yale University. "It was a part of my decision," Schoenbrun, 21, told Newsweek. "I was in the process of figuring out what I wanted to do, which is the whole point of college."
After considering legal and financial fields, the Texas native decided to set her sights on foreign service and continue in the classroom at Georgetown University's McCourt School of Public Policy.
"I want to be able to make a difference in government work or something adjacent but, given the current climate, a lot of people's decisions changed on where they wanted to go and how they wanted to spend their next few years," she said. "I've seen that on campus with friends who were originally going to work in D.C. and are having to pivot a little bit or ultimately they weren't really affected—they were going into a finance job that would maintain security over the next few years."
The New York Stock Exchange is seen during morning trading on April 21, 2025 in New York City.
The New York Stock Exchange is seen during morning trading on April 21, 2025 in New York City.
Michael M. Santiago/Getty
Staying in school will enable Schoenbrun to better prepare herself to enter the job market sometime in 2027, she said.
"I'm hoping there will be opportunities to make a positive difference at home and abroad for our country, and I hope that this administration will allow me to do that," the aspiring foreign service officer said. "And if I can't, there are other opportunities adjacent to the government."
Schoenbrun also considered nonprofits and government relations roles before deciding on graduate school, but noted how finding an attractive opening had "continuously" grown more competitive throughout her Ivy League experience.
"It's very difficult to navigate that, especially as a student who is the first in my family to go to a school like Yale," she said. "It's difficult to see where and how you can pursue your passions."
Bright Spots Amid 'Economic Uncertainty'
Hiring projections for the Class of 2025 have indeed cooled since last fall, when companies reported planning to employ 7.3 percent more graduates than they did from the Class of 2024, according to the National Association of Colleges and Employers. That figure has since decreased to less than 1 percent, NACE President and Chief Executive Officer Shawn VanDerziel told Newsweek.
"The market has tightened and has shifted from the expectations of the fall," he said. "Now we're looking at just about a flat market from last year. So, things have shifted a little bit."
Participants in a rally of scientists and researchers protest at the Lincoln Memorial against budget cuts and job cuts, among other things.
Participants in a rally of scientists and researchers protest at the Lincoln Memorial against budget cuts and job cuts, among other things.
Thomas M'ller/picture-alliance/dpa/AP
There are some bright spots in the "tight" market, VanDerziel said, including nearly 65 percent of employers who reported maintaining hiring levels from a year ago, according to NACE's Job Outlook 2025 Spring Update survey. Employers regularly report high demand for candidates with degrees in finance, computer science and accounting, but graduates across all disciplines should remain flexible, keep a positive attitude and remain determined while searching for their first post-college job, VanDerziel said. Networking is also critical.
"As a new college graduate, you should be leveraging everyone around you—continually telling the story of your job search and what it is you're looking for in addition to what you can offer an employer," he said. "You'd never know who you're talking to and how that person might be able to help you in your job search."
Elise Gould, a senior economist at the Economic Policy Institute, said college graduates a year ago found themselves entering a "pretty tremendous" market, citing strong wage growth and historically low unemployment rates.
People affiliated with the 50501 movement march through downtown Detroit, Michigan on Saturday, April 19, 2025, to protest the Trump administration on the 250th anniversary of the start of the American Revolution.
People affiliated with the 50501 movement march through downtown Detroit, Michigan on Saturday, April 19, 2025, to protest the Trump administration on the 250th anniversary of the start of the American Revolution.
DOMINIC GWINN/Middle East Image/AFP/Getty
"And it has been fairly strong through 2024," Gould said of the overall job market. "Unemployment is up slightly since its low last year, but it remains low by historical standards. When you look compared to the booming labor market of the late 1990s and early 2000s, the unemployment rate for young adults is still lower than that today—pretty much lower than any time before 2018."
Yet, while some key economic indicators look promising, hiring overall remains lower than pandemic levels, possibly making it more difficult for recent graduates to break into the market than a year ago, Gould said.
"And obviously, the thing we can't ignore is the policy landscape, what's happening right now," she continued. "The federal layoffs, layoffs of contract workers, announcements of layoffs in the private sector, hiring freezes—all of these things can make it harder for young workers to break in. A lot of the data says that things are pretty good, but there's obviously a fair amount of economic insecurity and concern on the horizon."
As fears of a recession escalate amid Trump's sweeping tariffs and cuts to the federal workforce, young workers would be especially impacted if the U.S. economy shrinks, Gould noted.
Shipping containers parked at the Union Pacific Railroad intermodal facility which specializes in rail services for freight and passengers on April 16, 2025 in Commerce, California.
Shipping containers parked at the Union Pacific Railroad intermodal facility which specializes in rail services for freight and passengers on April 16, 2025 in Commerce, California.
FREDERIC J. BROWN/AFP/Getty
"Sort of like the last hired, first fired," she said flatly. "They're just going to be less secure and face more uncertainty. So, I can see the trepidation because of that. When you look at the data touchpoints, things still look strong. I think it's the economic uncertainty that is particularly troubling."
Nich Tremper, senior economist at payroll services provider Gusto, characterized the job market for new grads as "tough and frozen" as many entry-level professionals are holding on to their coveted positions as businesses take a predominantly cautious approach. The average May and June hiring rate for the Class of 2025 is projected to be 44 percent lower than 2022 and down 16 percent from a year ago, according to Gusto data.
"Following the Great Resignation—or whatever we're calling that time between 2021 and 2023—there was a slowdown in recent grad hiring and that frozen labor market just seems to be keeping that going," Tremper said.
Tremper advised young candidates to embrace unpredictably as they plot their early career.
Profile shot of Eleanor Schoenbrun
Profile shot of Eleanor Schoenbrun
Annalie Sandor
"These graduates are entering a space where technology is rapidly changing," Tremper said of artificial intelligence. "There's really an opportunity for this younger generation to make its mark. They're natively using generative AI and they don't have to relearn based off the way that things have always been done. That's at least an exciting element of what the future might look like."
Consistent with data cited by VanDerziel and other experts, Jai Kedia, a research fellow at the Cato Institute, said jobs with the highest growth projections by the Bureau of Labor Statistics are primarily linked to STEM fields, with engineers, software developers, data scientists and financial analysts among those in demand. Teachers, religious workers and some media professionals have the slowest projected growth rates by BLS, Kedia noted. "Despite the recent uptick, the recent record of youth unemployment is among the lowest on record since the 1970s," Kedia told Newsweek. "Of course, employment is highly susceptible to the business cycle and youth unemployment even more so. If the economy heads into a recession, an unlikely but still possible outcome, we expect to see a surge in job losses for recent college graduates."
Washington, meanwhile, acknowledged she's facing formidable headwinds, particularly as she grapples with the prospect of repaying over $100,000 in student loans.
"Very concerned," she told Newsweek. "If I do not have a job lined up soon, I worry how I will be able to pay back any debt right away."