US college grads face muted job market, struggle to pay debt: Here's what it means for the upcoming job seekers
This unusual trend, excluding the pandemic time, is leaving students fresh out of US universities burdened with student debt, struggling to secure their first full-time job.
Official data reveals that unemployment for young, recent graduates from US universities currently stands at 5.8%, which is the highest since November 2013 (excluding 15 months in the Covid pandemic).
Notably, this figure remained stubbornly higher than the overall unemployment rate, which has stabilized between around 3.5 and 4% post-pandemic. The analysts call it 'an extremely unusual situation.'
The labor market for new grads has weakened consistently since 2022, with new hiring down 16% in 2025, year-over-year, reported AFP.
Analysts attribute this downturn to the following factors: Cyclical post-pandemic hiring slowdowns- Sectors that particularly hire a large number of new grads, like technology, finance, and business information are experiencing a slowdown.
Economic Uncertainty- The "tumultuous early days' of the Trump administration contributed to overall economic uncertainty, causing firms to freeze hiring.
Decline in openings for professional and business services - Job openings fell in these fields by more than 40% since 2021, with tech sector jobs disproportionately impacted.
While a slower pace in hiring due to companies 'right-sizing' after previous high recruitment rates is a factor, the potential impact of AI on jobs is also being discussed.
'The sheer volume of decline also points to the impact of AI,"Matthew Martin, senior US economist at Oxford Economicstold AFP, signaling the potential of artificial intelligence technology to eliminate some entry-level roles.
However Gregory Daco, chief economist at EY-Parthenon, cautions against jumping to the conclusion that AI had already begun to eliminate entry-level roles, emphasizing that most companies are still in the early stages of adopting these technologies.
The U.S. is perhaps the most expensive country for a university education, with an average cost of $27,673 per year for an undergraduate degree, according to official data.
In 2020, 36.3% of US undergraduates took on federal student loans, the data shows, with the Education Data Initiative putting average student loan debt for graduating students at $29,550.
Even without student loan debt, however, the weakening job market can leave some recent graduates feeling like they are stretched thin.
In a similar instance, 25-year old Katie Bremer, who graduated from American University with a dual-degree in Environmental Science and Public Health in 2021 could not find a full-time job in over a year.
She gradually found one but not in her field and even then, she had to supplement her income by babysitting. "I felt like I was constantly working," she told AFP.
Martin warned that "It's likely to get worse before it gets better".
Analysts mirrored a similar outlook, saying that there is little hope on the immediate horizon as it will likely take some time for the labor market to correct itself. A part of that adjustment will likely be students picking different majors.
The ongoing challenges are raising concerns among recent graduates about their long-term financial stability and ability to achieve young adult milestones, the news agency reported.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
30 minutes ago
- Time of India
Markets on edge as Evercore warns - Powell's Jackson Hole speech could spark a shocking 15% plunge
Inflation and jobs data confuse markets Live Events Stock market risks and Evercore's advice Hold a core portfolio of 'AI Enablers, Adopters, and Adapters' in tech, consumer, and communication sectors. Examples: Amazon (AMZN), Alphabet (GOOG), Micron (MU). Add healthcare stocks with good earnings revisions, like Pfizer (PFE) and Cigna (CI). Fund these buys by selling expensive stocks with weaker outlooks, such as Palantir (PLTR), Tesla (TSLA), and MicroStrategy (MSTR). FAQs (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel U.S. federal reserve chair Jerome Powell is expected to signal a drop of 25 basis points during his expected speech at the annual Jackson Hole meeting of the who's who of central bankers on Friday in Wyoming. Analysts at Julian Emanuel led Evercore ISI say the indication of the drop in rate could be the precursor to the real announcement during the Fed's mid-September wanted a 50 basis point cut (half a percent). Evercore warned that Powell's 'balanced view' could trigger a 7% to 15% market drop by October. Economic Outlook Looks Unclear – Evercore said both parts of the Fed's job – controlling inflation and keeping jobs strong – look 'muddled', as reported by Consumer Price Index rose less than expected, but wholesale prices increased faster than forecast. Jobs Market Data Also Mixed – Weekly jobless claims stayed steady this year. But U.S. job growth slowed to its weakest 3-month pace since 2010 (excluding the pandemic shock). Back in 2010, the unemployment rate was 9%, double today's Donald Trump has criticized Powell since returning to the White House in January. He wants the Fed to cut rates more deeply. Trump's Move Sparks Worries – In early August, Trump fired the Bureau of Labor Statistics chief after a weak jobs report. Economists fear this could lead to political interference in economic data, as per the noted that high stock prices and seasonal weakness are dangers. September is historically the worst month for stocks, even after strong rallies. Wall Street Rally Context – Stocks have been lifted by trade deals and strong earnings, but valuations are now close to the Dotcom Bubble made clear that Powell's speech could be a turning point: if markets don't like what they hear, a sharp 15% drop could hit by October, as stated by is expected to signal a 25 basis point rate cut at the Fed's September Evercore warns that markets could fall 7% to 15% by October if investors don't like his message.
Indian Express
30 minutes ago
- Indian Express
Bessent says US tariff revenues to rise ‘substantially,' focus on reducing debt
US Treasury Secretary Scott Bessent said he expects a big jump in revenues from sweeping tariffs imposed by President Donald Trump, and said the money would be used first to start paying down the federal debt, not to give rebate checks to Americans. Bessent, speaking in an interview on CNBC's 'Squawk Box,' said he expected to substantially revise upward his earlier estimate of $300 billion in revenues from the tariffs, but declined to be more specific. Bessent said he had not spoken with Trump about the idea of using funds from the tariffs to create a dividend for Americans, but stressed that both of them were 'laser-focused' on paying down the debt. 'I've been saying that tariff revenue could be $300 billion this year. I'm going to have to revise that up substantially,' Bessent said. 'We're going to bring down the deficit to GDP. We'll start paying down the debt, and then at that point that can be used as an offset to the American people.' The US economy could return to the 'good, low-inflationary growth' of the 1990s, Bessent said, but he blamed higher interest rates for problems plaguing some pockets of the economy, singling out housing and lower-income households with high credit card debt. A cut in the Federal Reserve's key interest rate – which Trump has continually pressed for – could help facilitate a boom or pickup in home building, which would help keep prices down in one to two years, he said. The US Census Bureau on Tuesday reported a small increase in groundbreaking for single-family homes and permits for future construction in July, even as high mortgage rates and economic uncertainty continued to hamper home purchases. Trump's wide-ranging import tariffs have kept the Federal Reserve from lowering interest rates this year, with most central bank policymakers wary of easing borrowing costs until they have more confidence the levies will not rekindle inflation, which has yet to return to the Fed's 2% target. Recent indications of softening in the job market, however, have largely convinced investors that the Fed will cut rates by a quarter of a percentage point when it meets in mid-September. That expectation has helped bring down mortgage rates in recent weeks. Bessent has previously said a 50-basis-point cut in rates was warranted.
New Indian Express
an hour ago
- New Indian Express
There is no logic to Trump's secondary tariffs anymore
As desperate Indian exporters calculated the crippling effect of the new tariffs, there was again a change of gear in Washington. Trump announced a summit with the Russian president to be held the day the sanctions were to be enforced, which were thus paused. While no deal emerged in Anchorage, there was a shift in goalposts from 'ceasefire' to a 'peace deal'. This being a long, complex process, Russia has now gained an indefinite pause. So, it is only logical that if the body of fresh US-Europe sanctions against Russia have been suspended, the 'secondary sanctions' too must go. Strangely, that has not yet materialised. Worse, a US negotiating team that was to continue the trade negotiations in India cancelled its visit. Befouling the air further, US Treasury Secretary Scott Bessent has labeled India 'recalcitrant' in the negotiations. There are other signals that the US tariff heat has not abated despite the new Trump-Putin bonhomie. White House trade advisor Peter Navarro has called on India to stop being 'a global clearing house' for Russian oil. It is time India exposed the double standards. China is the largest buyer of Russian crude, importing nearly half of Russia's oil exports, but faces no 'secondary sanctions'. Perhaps, Bessent gave the game away that India has been 'recalcitrant' about protecting its farm and dairy markets against US imports. Punishing India for buying Russian crude is just an arm-twisting tactic. The answer is for the US to return to the negotiating table to work out a midway deal, rather than destroy its relations with India over unworkable tariffs
