New American college graduates are struggling to find jobs because businesses have reduced hiring programs due to economic uncertainty, which could be an early sign of trouble for the broader labor market, as economists warn.
From July 2024 to mid-2025, post posts about the student and graduate recruitment platforms fell by 15% compared to the same period in the previous school year.
Internships are the common entry point for graduate workforce recently, and are also at the slowest pace on employment sites on the COVID-19-19 pandemic, according to figures shared by the Financial Times.
ING's chief international economist James Knightley warned that a slowdown in graduate recruitment could be an early sign of trouble in the labor market.
“The first thing is entry-level recruitment,” he said.
The economic uncertainty and stock market striking by President Donald Trump’s comprehensive trade tax on some of the most important trading partners in the United States has slowed many companies’ recruitment plans – exacerbating the already cool job market for entry-level candidates.
Last August and September, employers surveyed by the National Association of Universities and Employers predicted that this year’s graduates will be hiring 7.3% more than in 2024. However, by March this year, the estimate was cut to just 0.6%.
Due to “uncertainty and evolving market conditions,” Consulting Giant EY delayed the start date of new graduates and trading consulting businesses hired by the U.S. Strategic and Trading Consulting business.
An analysis of the current population survey by the Federal Reserve Bank of New York showed that the unemployment rate for college graduates aged 22 to 27 climbed to 5.8% from 4.8% in January. The overall unemployment rate in the United States is stable at 4%.
Guy Berger, director of economic research at the Institute for Nonprofit Burning Glass, said the labor market is "freezing" because businesses are hiring fewer jobs and fewer jobs at the same time, making it harder for early-stage workers to break into the workforce.
"People who already have jobs are relatively insulated," he said. "People who are looking for jobs face a more difficult environment."
According to the Bureau of Labor Statistics, the monthly hiring rate (the number of new employees is part of the overall employment) was 3.4% in the first three months of 2025, the slowest at the time in more than a decade.
The federal government's employment freeze was implemented on the first day of Trump's tenure and extended into July, which also hindered some popular career paths for graduates. In addition, many experienced federal workers cut down by Elon Musk’s so-called government efficiency division are competing with new graduates for shrinking opportunities.
Cindy Meis, director of undergraduate career services at the University of Iowa’s Tippie of Tippie Business School, said students seeking to arrange jobs before graduation are applying for more positions and have gone through a longer recruitment process because hiring managers are “cautious.”
“If you want to get into the labor market, it’s a very frustrating time,” said Allison Shrivastava, an economist who is indeed the recruitment lab.