College graduates are struggling to find jobs. AI is partly to blame
Studies show that although the U.S. economy is creating jobs, employment opportunities for incoming college graduates are declining as new degree holders face one of the toughest job markets in a decade.
“It’s a really tough time finding a job right now,” Cory Stahle, senior economist at Indeed Hiring Lab, told CNBC.
By most measures, the labor market is still relatively strong. The U.S. economy added more jobs than expected in September, according to the Bureau of Labor Statistics. However, the overall unemployment rate rose to 4.4%, and unemployment for young workers aged 16-24 was 10.4% in September.
The current job market is “a huge challenge for Generation Z members new to the workforce,” according to a report released this week. Oxford Economics he says.
Anders Humlum, an economics professor at the University of Chicago, said rising youth unemployment could be “an early indicator that the economy is slowing down or even headed for recession.”
A college degree is often seen as the best path to a well-paying job, but experts say that may no longer be as true as it used to be.
“For the first time in modern history, a bachelor’s degree is no longer a reliable path to professional employment,” Gad Levanon, chief economist at the Burning Glass Institute, told CNBC.
An analysis by Goldman Sachs found that the “safety premium” of a college degree is decreasing. Although college graduates are still less likely to be unemployed than their counterparts without a degree, this advantage is smaller than it has been for decades.
Job market worsening for new graduates
For recent college graduates, the cracks are starting to appear.
Although members of the Class of 2025 applied for more jobs than their 2024 counterparts (10 and under, respectively), they received fewer job offers than the previous class, by numbers of 0.78 and 0.83, respectively, on average. National Association of Colleges and Employers to create. NACE’s research, conducted between April 1 and May 30, 2025, interviewed 1,479 graduating seniors.
According to a report The survey, conducted in June and July 2025 by education technology company Cengage Group, found that only 30% of 2025 graduates said they had found a full-time job in their field, while only 41% of the Class of 2024 said they had done so. The survey included 971 recent graduates from across the US
“These workers are a vital part of the labor market, and if they’re having a hard time, that means the economy may be having a hard time, too,” Indeed’s Stahle said.
The market for 2026 graduates could be just as bad or worse.
Employers are less optimistic about the overall job market for recent graduates than they have been in the past few years, according to a separate report. report By the National Association of Colleges and Employers.
Nearly half, or 51%, of employers rated this year’s job market for college seniors as weak or fair; This is the highest share since 2020-21.
‘Long-term scarring effect’
According to the Oxford report, a weak labor market can have a negative impact over time on the economic well-being of young workers, especially in terms of wage growth and earnings potential.
“Unemployment for young adults is rising and wage growth is declining, which could have a hurtful long-term effect,” said Grace Zwemmer, an associate economist at Oxford Economics and author of the report.
“If these workers are having a hard time getting a job right now, that impacts their ability to earn,” Stahle said. “You start putting these things together, and that can actually lead to even greater income inequality.”
“There are huge economic consequences in the future,” he said.
