Class of 2025 Faces the Toughest Job Market in Years

For the graduating Class of 2025, landing a first job is proving to be a serious challenge—even in a labor market that appears stable on the surface.

While the national unemployment rate remains low at 4.2% and the U.S. economy has added jobs for 52 consecutive months, a deeper look reveals growing concerns, particularly for young adults just entering the workforce.

Entry-level hiring has slowed sharply. Uncertainty from global trade tensions, elevated interest rates, and the rapid rise of artificial intelligence have left many companies cautious about new hires. Some AI leaders have warned the technology could wipe out white-collar jobs entirely—or may already be doing so.

According to Oxford Economics, this is the worst job market for new college graduates since the peak of the COVID-19 pandemic. For the first time since 1980, the unemployment rate for recent graduates—those aged 22 to 27 with at least a bachelor’s degree—is consistently higher than the national average.

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

Recent data backs that up. The unemployment rate for those aged 20 to 24 sits at 8.2%, nearly double the national rate. Young men face an even tougher landscape, with joblessness rising to 9.6%—up nearly three percentage points from last year.

A significant drop in entry-level hiring is compounding the problem. LinkedIn reports a 23% decline in entry-level hiring since March 2020, a steeper drop than the overall 18% decline in hiring across the job market.

While employers aren’t laying off workers en masse, they’re also hesitant to bring on new staff—creating what some economists are calling a “no hire/no fire” environment.

“It’s a difficult state of play for workers looking for a new job,” said Thomas Simons, chief U.S. economist at Jefferies. “But it is supportive of lower inflation, higher productivity, and persistent economic growth in the long run.”

Still, the human impact is being felt now. The number of people collecting unemployment benefits recently hit a four-year high, signaling that job searches are taking longer and dragging on for many.

Jenna Macksoud, a 23-year-old graduate from American University, spent over a year applying for jobs—sometimes up to 10 per day—with little response.

“Looking back on it, it was definitely traumatic,” she told CNN. “It felt hopeless.”

Like many of her peers, Macksoud carried student loan debt—about $70,000. Despite starting her search with a focus on public sector and nonprofit work, she eventually pivoted and secured a role in business development at an IT and cybersecurity company.

She encouraged other recent grads not to give up.

“It’s a numbers game,” Macksoud said. “You have to change the mindset from being discouraged that you’re not getting anywhere, to attacking it and being persistent.”

As the job market tightens for young professionals, the pressure is mounting. Worker confidence among Gen Z has dropped to its lowest point on record, according to LinkedIn—lower even than during the early days of the pandemic.

Whether the situation improves will depend on broader economic stability—and whether entry-level opportunities rebound in the months ahead.