New Batch of College Graduates Faces an Increasingly Shaky Job Market

Written by Hilary Sargent | Apr 22, 2026 12:15:07 AM

This spring is shaping up to be the worst job market for young degree holders since the depths of the pandemic.

The unemployment rate for recent college graduates has exceeded the overall national rate for five straight years—something that was almost unheard of between 1990 and 2018.

By the numbers:

The unemployment rate for college graduates ages 22–27 soared to 5.6% at the end of last year, up sharply over the past three years, against an overall unemployment rate of 4.2%
42% of recent college graduates are underemployed, meaning they are working in jobs that do not typically require a college degree—the highest level since 2020
More than half of all U.S. college graduates are working in jobs that don't require degrees
The unemployment rate for workers with a bachelor's degree or higher climbed to 2.9% in January 2026, up from 2.3% a year earlier—while the rate fell for workers with no college experience over the same period
51% of employers rated the overall job market "fair" or "poor" for the 2025–2026 academic year, the highest level since the pandemic
Graduates could experience the highest jobless rate in years, according to a recent statement by BlackRock CEO Larry Fink

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The labor market has essentially stopped moving—and new graduates are bearing the brunt.

Most economists point not to AI but to a market that has frozen. Hiring has slowed to levels last seen after the Great Recession, and the industries that traditionally absorbed college graduates have been shrinking for years. Young workers entering for the first time are disproportionately affected.

"There's just a general slowdown in hiring and less churn. And so those who need their first jobs are probably disproportionately affected."

Adam Ozimek, Chief Economist, Economic Innovation Group, via The New York Times

What the data shows:

From 2023 to 2025, industries that employ the largest shares of college graduates—including information services, finance, and professional and business services—shed an average of 9,000 jobs per month. Before the pandemic, those same industries added 44,000 jobs per month
Industries that hire fewer college graduates, such as construction, transportation, and retail trade, added 12,000 jobs per month over the same period
The hiring rate slowed in February to its weakest pace since 2011, outside of the pandemic recession
Job openings have been trending down and are below pre-pandemic levels even as layoffs have remained low
Fewer employers are attending spring career fairs; some told university staff they were being more conservative in recruiting
Software began eliminating traditional white-collar jobs in fields like financial services well before generative AI arrived, and the Great Recession accelerated a decline that never fully reversed

"Hiring young people doesn't bring a lot of benefits right away. It is really an investment in the future. So if you're unsure about what that future will look like, then that's one of the first things you stop doing."

David Deming, Economist, Harvard University, via The Atlantic

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Is AI to blame for the graduate job crisis? Not yet—but the risk is real.

AI dominates the conversation around graduate employment. The data, for now, tells a more complicated story.

"I'm very open to the possibility that AI could displace entry-level workers. But we're just not seeing it show up anywhere in the data."

Martha Gimbel, Executive Director, Yale Budget Lab, via The Atlantic

What the research shows:

A study evaluating five different measurements of AI exposure found no meaningful AI impacts in the labor market from 2022 to 2025, regardless of how the data was analyzed
Employers cited AI as a reason for fewer than 55,000 of the 1.2 million job cuts announced in 2025—less than 5%
Still, a February 2026 Dallas Fed paper found AI is simultaneously reducing entry-level hiring and raising wages for experienced workers in the same AI-exposed occupations
College graduates are disproportionately employed in occupations with the greatest share of tasks that generative AI could eventually automate—meaning the risk is forward-looking even if current data doesn't show it yet

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The path to a first job runs through an internship. That path is narrowing.

For most graduates, internships are the primary on-ramp to full-time employment. The competition for those spots has nearly doubled in a single year.

The internship squeeze, by the numbers:

Internship postings tracked by Indeed last year were down compared to each of the prior five years, slipping slightly below 2019 levels
Handshake reported an average of 109 applications per internship posting in 2025, nearly double from the prior year
Competition was steepest in tech, at 273 applications per posting, and finance, at 192

A closer look at New York City:

New York illustrates the national trend in concentrated form.

The total number of available entry-level jobs in New York City fell 37% between 2022 and 2024, a loss of nearly 30,000 positions
Over 565,000 people who graduated from college between 2022 and 2025 were working in the city as of December 2025, up from 490,000 a year earlier—meaning more graduates are competing for fewer entry-level jobs
The number of paid internships in New York City fell from nearly 11,000 in 2019 to just under 7,000 in 2024

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Not all degrees are created equal—and AI is reshuffling which ones hold value.

Unemployment and underemployment rates vary widely by major, and the gap between a bachelor's degree and AI skills is growing.

The wage premium shift:

While the college wage premium—the earnings gap between college graduates and high school diploma holders—remains intact, it has barely moved since 2000, according to economists
AI skills now command a 23% wage premium, versus only 8% for a bachelor's degree, according to the World Economic Forum

Highest unemployment rates among recent graduates:

Anthropology: 7.9%
Computer engineering: 7.8%
Computer science: 7.0%

The appearance of computer engineering and computer science near the top suggests AI may be disrupting fields long considered safe bets.

Highest underemployment rates among recent graduates:

Criminal justice: 65.8%
Performing arts: 63.9%
Other majors above 50%: fine arts, leisure and hospitality, agriculture, anthropology, liberal arts, foreign language, animal and plant sciences, and communications

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Faced with a market that isn't delivering, the class of 2026 is adjusting its expectations.

The shift isn't giving up—it's recalibrating. Graduates are taking jobs they don't want, paying for coaching they shouldn't need, and growing steadily less confident that a degree delivers what it promised.

How graduates are responding:

89% worry AI could replace entry-level roles, up from 64% last year
76% are concerned the broader economy will affect their job prospects, according to Monster
67% say they would accept a lower-paying job if it offered greater long-term career security
69% are more willing to compromise on their ideal role than they were a year ago
75% say they would accept a job they expected to leave within a year if it provided immediate income
The share of graduates confident they'll land a job within three months has declined steadily: 88% in 2023, 82% in 2024, and 79% in 2026

The career coaching boom:

A tough market has spawned a new industry: private career coaches for college students, funded by parents willing to pay significant sums to give their children an edge.

In 2019, about 5% of career coaches focused primarily on college students or new graduates. The International Association of Career Coaches now reports more than a quarter consider that group a core segment
Career coaching for college students typically costs a few hundred dollars an hour; comprehensive packages range from $3,000 to $10,000
Some companies charge upwards of $30,000 for intensive support in finance and similarly competitive industries

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