US college graduates face tough job market amid economic uncertainty | Educational Matters

New York City, USA – Like clockwork every May, soon-to-be college graduates take to Washington Square Park in New York City wearing caps and gowns, often purple, the school color of nearby New York University. A sea of ​​20 elements come together to create images that show the moment when school life comes to an end and new graduates face the uncertainty of what will happen next.

Julie Patel, who recently completed her master’s degree in public health, was one of the graduates. But the workload has dampened the joy of the graduation ceremony.

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“I think the expectations of when I entered the program and when I came out of it in terms of job search, money and availability are two very different things,” Patel told Al Jazeera.

Like millions of his colleagues throughout the country, he is at risk of finding a job with difficulty due to the economic crisis driven by several factors, including prices, the increase in intellectual production, international conflicts, and, as a result, the decrease in public funding for his work, the lack of work, especially for new graduates.

The most recent Job Openings and Labor Turnover Survey released by the United States Bureau of Labor Statistics showed that with 6.9 million job openings in March, employers rose slightly by 655,000 to 5.6 million, and layoffs were 5.4 million. This means that for those who already have a job, they often don’t leave it to learn something new, which leaves students like Patel at a disadvantage.

“The risk of depression shows that it is very difficult for new entrants to enter the market,” said Elise Gould and Joe Fast in a recent analysis published by the Economic Policy Institute.

“Interest rates have fallen, indicating less stress in the labor market as workers and employers settle during the economic crisis, which may be related to the chaotic elections and the imposition of tariffs, deportations, and the conflict with Iran.”

The latest jobs report shows that the US economy added 115,000 jobs, with most of the growth focused on health care, transportation and retail.

However, some white-collar sectors have weakened. Financial services lost 11,000 jobs, while information services lost 13,000. By comparison, the class of 2025 entered the job market last year as the US economy added 177,000 jobs.

Overall, job growth has slowed significantly. So far in 2026, the economy has added about 68,000 jobs per month, compared to 49,000 in 2025, 186,000 in 2024, and 251,000 in 2023, despite the large figures for 2023 and 2021 caused by the COVID19 pandemic.

“We have a no-jobs, no-fire zone at the moment,” Aleksandar Tomic, associate dean of the arts, sciences, and technology at Boston College, told Al Jazeera.

“We’re not seeing the same level of employment as we normally do, and because of the layoffs, we have a lot of skilled workers looking for jobs that may be at the expense of college graduates.”

Government funding is confusing

Government funding cuts have affected potential employers in public health, the sector in which Patel is seeking employment.

In late spring, the Department of Public Works – which was led by the richest man in the world, Elon Musk – broke the programs and funds of the government, which he said at the time in order to reduce government waste. Among the cuts are about $4bn in research funding provided by the National Institutes of Health.

Research funding cuts have led to layoffs at universities across the United States, including schools such as Duke University in North Carolina and Harvard University in Massachusetts.

Universities will continue to announce cuts. Last month, the University of Maryland instituted layoffs, and Princeton University cut jobs. That affects research projects like the one Patel and classmate Molly Howard are working on.

“We’re not only competing against our team, but last year’s team and we’re going up against people whose jobs have been paid for, who have a lot of experience, and it’s all been very difficult,” Howard told Al Jazeera.

This comes as federal government cuts continue. The latest jobs report shows that the federal workforce fell by 9,000 in April — down 348,000 from the October 2024 increase — leaving government job seekers, such as Cathleen Jeanty, who is earning a master’s degree in international affairs from Columbia University, with fewer opportunities, and increasing competition for think tanks.

New graduates are also competing with current students for scholarships.

“I feel like I found myself competing with graduates, and then graduates competing for jobs with people who were laid off due to funding cuts, USAID (US Agency for International Development) closures, UN funding cuts, etc.,” Jeanty said.

“It feels like everyone is competing with people you’d think they wouldn’t be competing with.”

The AI ​​shoots

Artificial intelligence is also gaining importance for the workforce that is entering the workforce as well.

There is a 16 percent decline in early-career workers, including software engineers and those working in customer-facing roles, while the growth of knowledge workers remains steady, according to an analysis by the Stanford Digital Economy Lab that examined AI-enabled sectors.

“AI is seriously disrupting the entry-level job market. We’re seeing evidence of that. It’s doing two things: making it harder for candidates to enter, and increasing the demand for skilled workers,” Tomic said.

This is only expected to strengthen as time goes on. A Goldman Sachs study published earlier this month found that advances in AI will translate into roughly 16,000 jobs being eliminated from the economy each month.

The CEO of Anthropic, Dario Amodei, said several times last year that AI could eliminate half of the jobs in the white collar sector within the next five years.

The popularity of AI tools has declined among Gen Z over the past year. Twenty-two percent of Gen Z respondents are excited about AI, down 14 percent from this time last year as they enter a market with more competition among their age group, according to a Gallup poll.

“For the first time in many years, college graduates are entering the job market where they are competing with their peers, millennials, Gen X, and, in some cases, the kids who are about to be made redundant by AI. In many cases, entry-level roles are being eliminated and replaced by AI,” said Stephanie Alston, CEO of BG Recruiting Enterprise. Jazeera.

New graduates are also facing a job application process that is becoming increasingly AI-driven, making the barrier to entry even more difficult. AI-assisted recruitment has resurfaced in overburdened recruitment environments and the rise of fake applicants has disrupted the recruitment process. Consulting firm KPMG predicts that by 2028, one in four job applicants will not be genuine.

“I have had several interviews, but if I have to be completely honest, in the last month, I have applied for 60 positions and my response rate is about 10 to 12 percent, and it is disappointing,” Vivica D’Souza, who recently received a master’s degree in media and information technology from Northeastern University, told Al Jazeera.

With AI now, there is also the phenomenon that applicants are being asked by AI employers before they talk to a real person.

Courtney Gladney, who just graduated from the historically Black college (HBCU), LeMoyne-Owen College in Memphis, Tennessee, with a bachelor’s degree in business administration, told Al Jazeera that he has been interviewed by AI personas.

Gladney was on the job before returning to school to get his degree.

“We are in the era of AI. So these are new things that companies are using,” Gladney told Al Jazeera.

“I feel like sometimes it’s bad because I need the interviewer to read me against the algorithm.”

A new problem for an old problem

Work stress is not a new issue at all. In 2020, new graduates faced a tough job market due to the outbreak of the COVID-19 pandemic. In 2008 and 2009, new graduates began working during the Great Recession.

However, Tomic says that in 2026, the US economy will tell different stories to different people.

The turmoil during COVID, for example, affected many economies, while price pressures hit lower-income households more than higher-income households. When it comes to the workforce, the migration of AI has put more risk on less-skilled roles and significantly boosted those with more experience.

“The labor market for skilled workers is very different from that of unskilled workers,” Tomic said.

“It (AI) has not affected skilled workers as much as it has affected unskilled workers. Instead, we have seen data showing that the demand for skilled workers has increased, while it has decreased for unskilled workers, especially in jobs that tend to be displaced by AI.

The unemployment rate among recent college graduates has doubled over the past two decades. In June 2020, it reached 13.4 percent, slightly higher than the 12.9 percent of the general population at the height of the COVID-19 pandemic. It also rose sharply after the Great Recession of 2008, reaching 7.1 percent in May 2010 after several years of rising unemployment. That number, however, remained below the general unemployment rate of 9.8 percent, according to a survey from the Federal Reserve Bank of New York.

It is much lower now, at 5.6 percent, but still higher than the general population at 4.2 percent.

Unemployment, however, has not changed much, standing at 41 percent among recent college graduates, compared with 43 percent this month 10 years ago and 42 percent at this time 20 years ago, according to data from the Federal Reserve Bank.

This also means that this is not an area that is not really mentioned in colleges and universities.

“We have to tell students that this is not the first time we’ve been here. I mean, this is part of the economy. This is a real situation. There are highs and lows in the economy,” said Christopher Davis, president of LeMoyne-Owen College.

Davis emphasized that while AI and political uncertainty have created challenges for students, focusing on soft skills, such as interpersonal communication in the age of AI, will help students move forward.

“The degree may get you an interview, but it’s the soft skills that not only get you a job, but also help you keep that job.”