Mohammed thought the US economy was doing well before he graduated last week. After looking for finance jobs with no luck, he is not so sure.
“I’ve been hearing a bunch of mixed messages about the workforce,” said the new alumnus of the State University of New York at Albany, who asked that his last name be withheld to protect his career prospects.
“On one hand I’m going into a great workforce and on the other hand there are not a lot of jobs. I do not know what to believe . . . it is a little worrisome.”
The class of 2024 had high school graduations cancelled during the coronavirus lockdowns of 2020 and recent protests over the Israel-Hamas war have disrupted commencement celebrations. Now many of them fear an uncertain labour market will dash their hopes for another rite of passage: their first jobs.
The National Association of Colleges and Employers projects US employers will cut their hiring of freshly-minted graduates by 5.8 per cent this year compared to 2023. That would be the largest drop in hiring since NACE began surveying employers in 2015.
Meanwhile, the unemployment rate for graduates aged 20 to 24 with bachelor’s degrees rose from 4.2 per cent to 5 per cent in the year to April, according to the Bureau of Labor Statistics.
“If you are a college senior, you have already been through a lot,” said Nick Bunker, an economist at jobs site Indeed. “Maybe you know someone who graduated a couple years ago when the labour market was really tight, and now just two years later, it’s not as easy to get a job as you would have thought.”
Hiring cuts at pharmaceutical companies and electronics manufacturers, and in finance and insurance are driving the decline, according to NACE’s survey of its employer members. This year’s graduating seniors say they have struggled to land the types of high-paying entry level roles they studied for.
The number of job postings for the types of white-collar roles that students at selective universities tend to prefer, including in finance, software development and marketing is “very low”, Bunker said, having fallen below pre-pandemic levels after booming in 2022.
Job growth has slowed more generally in recent months, with US employers adding 175,000 jobs in April, far fewer than economists expected. Openings have fallen 30 per cent over the past two years, according to the labour department, with employers in finance and insurance cutting 158,000 advertised roles in March, pushing the number of openings to the lowest level in three years.
Joseph Mercadante, senior associate director of New York University’s Wasserman Center for Career Development, said he went into this recruitment cycle with high hopes. It was the first time the centre’s career fairs took place fully in person since the pandemic.
His students, however, were unusually anxious.
“Over the past two years, all they have seen in the headlines about the jobs market is thousands of people getting laid off,” said Christine Cruzvergara, who leads education strategy at Handshake, a US jobs site targeting college students.
Rising interest rates pushed tech companies to axe 263,180 employees in 2023, a 59 per cent increase from 2022, according to job cuts tracker Layoffs.fyi.
Members of the class of 2024 submitted more applications on average and applied for a wider range of roles than their predecessors, according to Handshake’s internal data. In its surveys, they ranked a desire for stability as the most important driver in their search.
Big Tech companies including Meta dramatically scaled back their on-campus recruiting programmes at many universities including NYU after conducting high-profile rounds of lay-offs, but healthcare companies and government agencies were looking for software developers and data analysts, Mercadante said. Wall Street banks and consulting firms still met with students on NYU’s campus, he added.
But those companies seemed to be making fewer job offers this year than they did to previous classes, said James, a graduating senior at NYU who asked that his last name be withheld because he was not authorised to speak publicly about the recruitment process.
“It’s definitely a shock, especially as [my classmates have] been doing all the right things on paper, looking for internships, doing lots of networking,” he said. “Opportunities are just scarce.”
Professional services firms including McKinsey, KPMG, and Bain have worked to reduce their headcounts in recent months by pushing out their lowest performers as the number of consultants voluntarily leaving the groups has dropped amid economic uncertainty. EY delayed start dates for some of its 2023 graduate hires by almost a year, to July and August of this year.
“I would say the power has definitely shifted more towards the employer,” Mercadante said. “They have the upper hand a little bit more . . . there’s just fewer jobs than there were, but there are still a good amount.”
Branden Grimmett, an associate dean at Emory University in Atlanta, said fewer of its seniors had their job offers deferred or cancelled this year than last. This year’s Emory graduates received offers from AstraZeneca, BlackRock, the City of Atlanta, Epic Games and the US Department of State.
Mohammed is still hopeful he will find a job, saying his plan is to work for five years before starting a company of his own. Still, most graduates remain fearful about the job market, Grimmett said.
James was ultimately offered a position at a mid-sized management consultancy. His job search was “demoralising and difficult”, he said, but “I know I am one of the lucky ones”.