This year’s graduating seniors had a rough start to college, learning remotely during the Covid pandemic. Now they are entering a job market that is cooling after several years of robust growth.
While nonfarm payroll growth has averaged 245,500 a month so far this year, a lot of the recent hiring has been in industries such as leisure, hospitality, and retail, which typically offer hourly work that doesn’t require a four-year degree. Government hiring was down substantially in April, suggesting the past year’s job growth there has likely run its course.
Hiring projections are down 5.8% from last year for the college class of 2024, according to recent research by the National Association of Colleges and Employers (NACE).
“Recent grads are about to enter a cooler labor market than a few years ago,” says Nick Bunker, director of economic research at Indeed, which operates the job-search site indeed.com.
The healthcare sector continues to hire at a steady clip, with the industry adding 63,000 jobs to payrolls over the past year, according to the BLS. Given the demand for healthcare, it is a good option for recent college graduates that still offers competitive salaries and job stability—even to younger workers.
Some manufacturing employers, such as food and beverage suppliers and professional services companies, are also projecting increases in hiring of younger college grads, says NACE.
Sales remains a perennial area for hiring among recent graduates, with the demand for entry-level sales representatives holding a bachelor’s degree up 8% this year compared with last year, according to job-postings data at Lightcast, a labor-market analytics firm. Demand for business development jobs and sales managers is up 3%, and the need for account managers with a college degree has seen a 13% increase year-over-year.
The hiring outlook at tech companies is more challenging, especially because recent grads will likely face more competition for open roles from those who have recently been laid off, and younger workers looking to switch jobs. Also, open roles are more scarce. Job postings for software development roles, for example, are down 30% since February 2020, according to Indeed.
Landing a job could require more work this year. Among the Class of 2024, students have applied to more than 21 jobs, on average, since the start of the fall recruiting season, according to a recently released report on this year’s graduating seniors conducted by Handshake, a campus recruitment website and app. That compares with just 14 job applications that members of the Class of 2023 completed, on average.
About 30% of students planning to graduate this year reported they had a job or graduate program lined up before crossing the stage, according to Handshake’s surveying. About 70% of students who were still firming up their postgrad plans indicated they were confident they would find a job or an opportunity where they could put their degree to work.
Ben Brussat, who graduated from the University of Wisconsin-Madison on May 11, is one of those feeling confident about his job prospects. After narrowing down his focus to business-development and sales-development roles, he sent out about 30 applications and received six positive responses so far. He said he is currently in the final round of interviews with one employer, about a month after submitting his initial application.
“I’m really comfortable with where I am now in terms of the job-hunting process,” Brussat, who graduated with a degree in Consumer Behavior and Marketplace Studies, told Barron’s.
For those still looking, about 32% of U.S. jobs available on LinkedIn in April were entry-level positions—the same share as last year, according to the job site’s internal data.
Yet, there were about 4% fewer job postings than last year for entry-level roles for recent graduates with a bachelor’s degree, according to data from Lightcast.
“What we’re seeing from the latest jobs-report data is a bifurcation: Non-college-degreed jobs are very healthy, while college-degreed jobs and job seekers are seeing more strain,” says Rachel Sederberg, a senior economist at Lightcast.
The unemployment rate among Americans ages 20 to 24 was 6.7% in April on a seasonally adjusted basis, according to the Bureau of Labor Statistics. That is significantly higher than the national average of 3.9%.
During the first quarter of 2024, the unemployment rate among recent college graduates was 4.7%, according to recently released data from the Federal Reserve Bank of New York. That was relatively unchanged from the end of 2023, but the so-called underemployment rate among recent graduates, which measures those holding a job that doesn’t make use of the employee’s skills or degree or doesn’t offer full employment, rose to 40.8%. That was in line with pre-pandemic levels, and the highest reading in nearly two years, according to the New York Fed.
The challenges presented by a cooling labor market could make a difference in the career trajectories of graduating seniors. Some 52% of college graduates were underemployed a year after graduation, according to data from 2012 through 2022 analyzed by the Burning Glass Institute and the Strada Institute for the Future of Work. People who start underemployed tend to continue on that path and earn about 33% less if they stay in jobs that don’t adequately utilize their degree, the research finds.
Which puts even more pressure on graduating seniors to start off on the right foot.