Economists and career coaches agree: Recent college graduates should expect to work harder and longer to land their first job out of college.
The total number of new jobs created in 2025 has trended downward since April, with the data for September not fully known because of the federal government shutdown that started on Oct. 1. Recent college graduates are likely to feel the brunt of a tighter labor market first, as employers tamp down on new hiring, and workers who might have left hug their jobs.
According to an August report from the Federal Reserve Bank of St. Louis, recent graduates are seeing higher unemployment rates — from 3.25% in 2024 to 4.59% in 2025.
“This 1.34 percentage point increase represents more than just a statistical noise; it reflects a significant shift in how the economy is absorbing newly educated workers,” Federal Reserve researchers Serdar Okzan and Nicholas Sullivan wrote earlier this year.
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Fewer jobs, more applicants
Industry groups and university career coaches are seeing similar trends as well.
The National Association of Colleges and Employers surveys universities, employers and recent college graduates about where students find jobs after graduation. It takes NACE researchers about a year to compile how each graduating class fares.
For the class that graduated in the spring of 2024, NACE had originally estimated that there would be an increase of jobs available by about 7 percentage points compared to the 2023 spring class.
“However, once the spring came, those numbers dropped to about flat,” Shawn VanDerziel, the president and CEO of NACE said. “We knew it was going to be a very tough job market for that class.”
Looking ahead to the spring 2025 class, NACE is expecting to see a decline in hiring. Post-college job prospects are weakest for those that graduated during the height of the COVID-19 pandemic in 2020 and in 2021, with a significant rebound for all workers boosting employment rates in 2022.
While the pandemic was disruptive for work, the job losses and underemployment were not as significant as during the Great Recession, however. White-collar work is undergoing shifts, as layoffs of federal workers are flooding the market with experienced workers.
“Of course, when you have an influx of new entrants, that is going to be competition for new graduates,” VanDerziel said.
Higher education institutions have adapted to changes in the labor market by providing career coaching to students as early as the first semester freshman year.
When the job market gets competitive, planning for multiple scenarios is key.
“This is something we talk about quite often when either a student is trying to get into a job that is extremely competitive, or even a graduate program that is extremely competitive,” Angi McKie, the assistant provost and executive director at the Pomerantz Career Center at The University of Iowa, said. “So what this means is not waiting until you get that no to start your next approach, to start Plan B, but to be working on a couple plans at the same time.”
McKie’s team emphasizes the power of personal connections to cut through the noise of applications and encourages students to diversify their experiences to highlight their unique skills. Research, volunteer work, part-time work and campus activities all can showcase an individual's skills, McKie said.
The increased volume of applications also means that students may never hear back from some employers, but relying on personal contacts might prevent an applicant from being “ghosted.”
Some have described this phenomenon as a “humiliation ritual.”
“But once you've followed up a couple times, if you're not hearing back, it's time to move on again, McKie said. “Don't take it personally. You are going to find that job that you're looking for.”
Economists remain optimistic
Eric Thompson, an economics professor at The University of Nebraska-Lincoln, cautions against worrying too much about recent fluctuations in recent graduates' unemployment rates, as that population tends to be at the most disruptive part of their lives.
“Young grads are in a period where they’re selecting their career match,” Thompson said, “Anytime you’re changing jobs more often, you’re going to be more likely to experience periods of unemployment.”
While the shifts may be worrying for graduates, Thompson remains confident that the fundamentals of the economy remain strong.
Peter Orazem, an economics professor at Iowa State University, said recent college graduates should expect to spend at least six months finding their first jobs. Starting the search while in college is the smart move, but the quest for employment might last longer if the demand for labor keeps slipping.
“Any group that has relatively less work experience or less education gets hurt more when you start moving into an economic slowdown,” Orazem said. “And we’ve certainly seen a slowdown in the demand for workers in the last year or so.”
Still, a tighter job market provides some opportunities – such as living at home and working in the gig economy to have full control over hours worked.
While a 2024 Midwest Newsroom/Emerson College Poll found that two-thirds of voters say that a four-year degree isn’t worth the cost, the aggregate data tells a different story.
Orazem said completing a college degree is still a good investment, as college graduates make on average 66% more than people without a higher education.
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METHODS
For this article, senior data journalist Daniel Wheaton spoke to two economics professors, the director of the University of Iowa Pomerantz Career Center, and the president and CEO of the National Association of Colleges and Employers to obtain different perspectives on the current job market for recent graduates. He gathered data from the New York Federal Reserve and The St. Louis Federal Reserve. Federal Reserve members were not available to comment on the story because of the October FOMC meeting.
REFERENCES
Have You Hugged Your Job Today? | (New York Times, Oct. 10, 2025)
‘It Feels Like I’m Just Trying to Make My Robots Talk to Their Robots’ Why the job search has become a humiliation ritual | (The Cut, Oct. 16, 2025)
Recent College Grads Bear Brunt of Labor Market Shifts | (St. Louis Federal Reserve Blog, Aug. 25, 2025)
Midwest Newsroom Poll | (Midwest Newsroom, October 2024)
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