For recent college grads, entering the world of work is proving to be more challenging than expected. 2025 statistics indicate a tightening job market.
Rising Unemployment & Underemployment
Put simply, first quarter numbers were not good. According to the Federal Reserve Bank of NY, the unemployment rate for those aged 22-27 jumped to 5.8% in March 2025, the highest reading since 2021. With a relatively stable overall unemployment rate of 4.2%, it’s no wonder recent spring grads are experiencing fear and anxiety about how they are going to enter the workforce.
Underemployment is also a concern. The Federal Reserve Bank of NY reports that 41.8% of recent graduates are underemployed as of March 2025. Recent grads are often working outside their fields of study and often in positions that don’t require their very expensive degree.
Economic Headwinds
NACE, The National Association of Colleges and Employers is forecasting new grad hire rates will be 16% lower in 2025 compared to 2024. If that drop does not seem extreme, consider the new grad hire rate this year is 44% lower than May, 2022.
Why are 2025 College grads struggling?
- Geopolitical tensions, slowing economic growth, inflation, and tariffs are adding to economic weakness and confusion.
- The rise of Artificial Intelligence is causing companies to re-evaluate entry-level job descriptions and automate non-complex tasks over concerns that AI might reshape workflows.
- With lower job creation, new job postings are drawing more applicants. With so many candidates, employers can demand at least some prior relevant work experience. Catch-22 anyone?
Salary Trends- A Bright Spot
Despite the hiring slowdown, starting pay for new college graduates has remained resilient. Starting salaries are up 3.8%, outpacing the inflation rate of 2.4% as of March 2025. This translates to a slight uptick of 1.4% in real earnings compared to last year.
Best regions of the country to find an entry level job include San Francisco and San Jose with increases in both hiring and pay, thanks mostly to an AI boom in Silicon Valley.
According to NACE, top salaried career tracks are in engineering and computer science ($78,731 and $76, 521 respectively). Not surprising, however, I found it notable that engineering has overtaken computer science. Fields like science, social sciences, and communications, on the other hand, have seen a decline in starting salaries.
As a reference point, the average annual pay for an Entry Level College Grad in the United States, as of June 12, 2025, is approximately $49,574.
Navigating the Current Landscape
Here are what experts suggest to improve your chances of landing an entry level job.
- Two-thirds of job seekers find a job through networking. However, many entry level candidates are too focused on responding to postings. LinkedIn makes networking far less intimidating than in the past. Network, network, network.
- Skills-based hiring is a positive development. Nearly two-thirds of employers are using skills-based hiring to select candidates. This new emphasis on capabilities over credentials should be exploited. Demonstrating problem-solving, collaboration, and continuous learning skills is crucial for just about any career path.
- Understanding and embracing AI tools is becoming increasingly vital. Some predict it will soon be a mandatory skillset for most jobs.
While challenges exist, adaptability, strategic job searching, and a focus on in-demand skills will be key for new graduates. Good luck to all!
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