Young College Graduates Are Facing the Grimmest Job Market in More Than a Decade

On a private message board used by college employment staff nationwide, a career center administrator at the University of Delaware quietly asked a question sometime in January. She wanted to know if anyone else had noticed a decline in the number of employers attending their spring career fairs. The replies came in quickly, and they were all the same. Indeed. We are also witnessing it. The hiring environment is not favorable. The struggle is genuine. What had started out as a professional check-in between educators swiftly evolved into something more akin to a group therapy session, with each message reiterating what everyone had already suspected but had been reluctant to express.

The atmosphere surrounding the class of 2026 was encapsulated in miniature in that private forum. According to the Federal Reserve Bank of New York, the unemployment rate for college graduates between the ages of 22 and 27 increased to 5.6% by the end of the previous year, surpassing the 4.2% national rate at the time. For the first time since 2020, over 40% of recent graduates are employed in positions that don’t even require a degree. While the number of applications for each open position increased by 26%, full-time job postings decreased by 16% annually. If you are 22 years old and have $40,000 in student loan debt, it can be challenging to reconcile the two stories that the numbers and human reality tell.

Spring 2026  ·  Worst hiring season since the pandemic  ·  Multiple data sources

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In December, Erin Torres received her psychology degree from Barnard College. Her goal was to work in product management for a technology company, a position that, only two or three years prior, was actively seeking recent graduates with liberal arts degrees and offered beginning salaries that made all those late nights in the library worthwhile. When nothing came up, she expanded her search significantly, looking for jobs as a business analyst, an operations specialist, or anything entry-level that could be considered white-collar in a corporate setting.

She applied to nearly 200 jobs in about two months and got four interviews. She currently resides in Huntington, New York, with her parents, and she works part-time as a restaurant host at a Long Island Saks Fifth Avenue that she recently found out is closing. She has begun attending therapy sessions. She has half-seriously thought about launching her own business because, in her words, it might be simpler than joining an established one.

Torres is not an anomaly. She is the best example of what economists refer to as a “low hire, low fire” labor market. Even though layoffs are still historically low, job openings have been declining and are currently below pre-pandemic levels. As a result, businesses operate more efficiently, current workers remain in their current positions, and the pool of potential new hires has nowhere to go. Everyone looking for their first job is affected by this dynamic, but young people with degrees are particularly affected because uncertain employers are less likely to make the kind of training investments necessary for entry-level hiring. When a 35-year-old with ten years of experience is available, possibly less expensive after the most recent round of tech layoffs, and doesn’t require any onboarding, why hire a 22-year-old with no experience?

The AI explanation is alluring and has garnered a lot of attention, in part because it is genuinely concerning and in part because it is more fascinating to write about than the bureaucratic grind of a stagnant labor market. AI may eliminate half of entry-level white-collar jobs by 2030, according to Anthropic CEO Dario Amodei. According to a Stanford Digital Economy Lab report from November, early-career workers in industries most susceptible to automation—software development in particular—saw quantifiable employment declines. These results are significant. However, the majority of economists who focus on this issue think they only slightly contribute to a structural issue: too many recent graduates vying for a hiring pool that has subtly shrunk since the end of the post-pandemic hiring boom, concentrated in precisely the industries that recent graduates have traditionally targeted: technology, media, accounting, and consulting. Since then, the industries with the most notable hiring spikes in 2021 and 2022 have had the most aggressive headcount discipline.

The immediate data is also part of a longer-arc story. Because life expectancy has increased and retirement has become more difficult financially, older workers have been staying in the workforce longer since the 1970s. This has led to a quiet congestion in white-collar hierarchies: entry-level positions don’t open because mid-level positions are blocked, and mid-career employees don’t advance because senior employees don’t leave. This was momentarily disrupted by the pandemic, creating a brief period of exceptional mobility that greatly benefited many of the graduates who entered the market between 2021 and 2023. After that, when traffic has returned and the need to fill positions has mostly subsided, the class of 2026 will enter the window.

The timing’s particular cruelty is difficult to ignore. With a great deal of sincerity, this cohort was informed that obtaining a college degree was the most obvious route to financial stability. They may have reasonably concluded that the market would continue to be favorable after witnessing their slightly older peers get hired fast and well during the post-pandemic boom. Rather, they are graduating into a labor market that is both technically sound by conventional standards and genuinely hostile to anyone arriving without experience, something that neither resembles the boom nor an outright recession.

Nearly all economists who research this topic are cautious to state that college degrees are still important, that graduates’ unemployment rates are still lower than those of young people without them, and that things will probably get better as the economy gains momentum again. That’s most likely accurate. For someone who has just submitted their 200th application, it doesn’t make any of it any simpler.