Despite the reputation of some Gen-Zers as being resistant to adapting their personal habits and priorities to workplace expectations, that cohort faces a tough economic backdrop as it’s most recent college graduates try to enter the labor force. Indeed, new data shows Class of 2025 college graduates are already finding unexpected obstacles as they look for a first job.
The U.S. job market has remained remarkably solid, despite economic contraction in the first quarter and rampant uncertainty among businesses about the looming effects of import tariffs. The unemployment rate remains historically low, at just 4.2 percent.
Recent and soon-to-be college grads are facing a different outlook. According to the Federal Reserve Bank of New York, the jobless rate for people with newly minted diplomas rose to 5.8 percent in March, compared to 4.6 percent for the same month the previous year. Evidence suggests those numbers are more likely to increase than decline.
According to the campus recruiting company Handshake, the number of job postings on its platform for 2025 graduates has fallen 15 percent in recent months. But over the same period, average application rates for each position that is available have increased by 30 percent.
Those divergent trends help explain why 56 percent of those job-seeking grads are pessimistic about starting their careers in the current economic and employment environment. That sentiment was even shared by respondents with what in recent years have been actively recruited majors like computer science s—28 percent of whom now describe themselves as “very pessimistic” about landing work, compared to 18 percent a year ago.
Why the grim outlook? Fear of a potential recession that stifles hiring is a big factor. But broader developments like the increasing introduction of artificial intelligence (AI) tech in workplaces is another reason.
As companies deploy those apps to perform repetitive, relatively basic tasks like research, document preparation, content creation, and even some coding, the kind of work that has typically given to entry-level recruits is now being done by bots. Consequently, 62 percent of Class of 2025 respondents said they worry about how AI will affect jobs they were hoping to land—and their odds of getting them.
But the headwinds don’t end there. The slashing of an estimated 260,000 government jobs by the Trump Administration since January is also complicating their job hunt.
“In early January, the Class of 2025 was on track to meet and even exceed the number of applications to federal government jobs” compared to last year, Handshake chief education strategy officer Christine Cruzvergara told CNBC. But by May, the percentage of recent or impending grads applying for government jobs dropped to 4.4 percent of total candidates, compared to 5.5 percent at this time last year.
Still, don’t expect this subsection of Gen Z—whose formative years were influenced by pandemic upheavals—to give up so easily. Instead, participants in Handshake’s survey said they’re adapting to increase their chances of getting hired.
That begins with a rising number of grads putting aside earlier plans to work for big companies. Around 37 percent of respondents said they’ve applied to smaller businesses with fewer than 250 employees, compared to 25 percent just three years ago. As part of that, 57 percent of participants said they’d put previous objectives of finding their dream job on hold to pursue the more pragmatic goal of getting whatever work they can secure.
Meantime, the Handshake survey found respondents far more self-critical, and eager to improve their weaknesses than the reputation of their already working Gen-Z peers might suggest. Asked which areas participants felt they needed help with most, giving feedback to leaders ranked highest, followed by asking for support, participating in meetings, and communicating in person.