Are recent college graduates having a hard time finding employment
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Executive summary
Recent college graduates are facing a noticeably tougher labor market in 2025: unemployment and underemployment for recent grads have risen to multi-year highs and hiring of new graduates has fallen, even as starting pay for those hired has ticked up in some sectors [1] [2] [3]. That said, the picture is mixed—college grads still often fare better than non-degree peers on several measures, and industry- and region-specific demand (especially for in‑demand tech and STEM skills) changes the odds substantially [4] [5] [3].
1. Rising joblessness and underemployment — the headline numbers
Multiple federal and private trackers show unemployment among recent college graduates elevated in 2025: the New York Fed reports an average recent‑graduate unemployment rate of about 5.3% in Q3 and an underemployment rate that climbed to 41.8%—the highest since 2020—while other series put spring 2025 readings near 5.8% and monthly snapshots in the mid‑to‑high single digits versus much lower pre‑pandemic levels [1] [6] [7]. Payroll and hiring metrics from firms like Gusto also report new‑grad hiring down roughly 16% year‑over‑year, a sign that fewer entry opportunities exist even when overall payrolls look stable [3] [7].
2. Who is worse off — nuance by age, field and geography
The pain is not uniform: unemployment rises are concentrated among the youngest recent grads and in some white‑collar/tech occupations that saw rapid expansion and then contraction, while other fields and metros still show robust hiring and even double‑digit starting‑pay gains for certain in‑demand skills [8] [3] [9]. Federal Reserve and Cleveland Fed analyses underscore that although relative prospects for college graduates have weakened compared with earlier years, once employed graduates still often enjoy better job stability and pay than high‑school graduates—so degree value persists, but entry has become harder [2] [4].
3. Why employers are hiring fewer new grads now
Observers point to a blend of cyclical and structural causes: softer overall hiring and employer caution amid economic and trade uncertainty, large tech sector layoffs and restructuring, the rise of skills‑based hiring that favors experienced or demonstrable technical capabilities, and the early effects of automation/AI trimming some entry‑level tasks—each factor is documented in reporting and research as contributing to weaker demand for inexperienced entrants [9] [10] [4] [2].
4. Countervailing signs — pay, internships and long‑run prospects
Not all data point to collapse: starting salaries for new hires rose in many metros (Gusto reports a 3.8% national increase year‑over‑year and stronger gains in tech hubs), experiential learning and internships remain correlated with higher starting pay, and broader measures show total employment of college graduates grew between 2021 and 2023—even as entry from new graduates weakened more recently [3] [11] [5]. These patterns suggest quality gaps: fewer hires overall, but better compensation for those with relevant experience or in hot markets.
5. Competing narratives and potential agendas in coverage
News outlets and advocacy pieces emphasize the “crisis” angle—which is supported by clear worsening in entry metrics—but private‑sector trackers and think pieces caution against overgeneralizing: some pieces highlight relative advantages of degree holders and regional/occupational winners [10] [4] [5]. Pay and hiring data from platform firms can reflect client bases and forecasting methods (Gusto’s sample of employer customers), and media stories may select vivid anecdotes of hundreds of applications or tech layoffs to dramatize trends; readers should note these methodological and narrative lenses [3] [7].
6. Bottom line and limits of the evidence
The evidence supports a direct answer: yes—recent college graduates are, on average, having a harder time finding employment in 2025 than they did pre‑pandemic, with higher unemployment and underemployment and weaker entry hiring [1] [6] [7]. That qualification matters: the disadvantage is uneven by occupation, region and skill set, and degree holders largely retain advantages over non‑college peers once employed [4] [5]. Source limitations include differing time windows, data definitions (who counts as a “recent” grad), and private‑platform coverage biases; those caveats mean ongoing monitoring is required to see whether the trend is transient or structural [1] [3].