This year’s economic climate has presented challenges for new graduates and job seekers, potentially exacerbated by a recent slowdown in job creation.
While overall job growth has been reasonably strong, it softened in May. The Bureau of Labor Statistics (BLS) reported a 139,000 job increase last month, a decrease from April’s 147,000, but still near the average monthly gain of 149,000 over the past year.
New graduates seem to be encountering specific obstacles in the hiring process. The unemployment rate for 22 to 27-year-olds rose to 5.8% in March, compared to the broader unemployment rate, which has remained relatively stable since May 2024, according to the latest BLS data.
Economic uncertainty stemming from President Donald Trump’s evolving tariff policies has influenced the current economic landscape. However, experts suggest that the current job market trends began with the Federal Reserve’s interest rate hikes in 2022.
“Hiring has been decelerating for the past three years,” states Kory Kantenga, head of economics of the Americas at LinkedIn. “This indicates a job market with weak momentum.”
The following are expert tips on how to successfully find employment.
Identify Growing and Declining Industries
Although hiring is slowing down in several sectors, healthcare is experiencing a boom, showing the highest employment growth. According to the BLS, over 62,000 positions, primarily in hospitals and ambulatory services, were added in May, accounting for nearly 45% of all new jobs nationwide.
The leisure and hospitality sector followed closely, adding 48,000 jobs, continuing a trend of adding at least 30,000 jobs per month, according to the BLS.
“Outside of those two sectors, employment growth was minimal, which is concerning,” notes Harry Holzer, an economist, Brookings Institution fellow, and Georgetown University professor.
Federal funding reductions are also significantly impacting the research sector, potentially jeopardizing jobs at universities and other organizations. Additionally, federal government employment has decreased substantially under President Donald Trump’s second term, making Washington, D.C., a highly competitive job market. Since January, payroll employment in the federal government has decreased by almost 60,000, although the actual figure might be higher because employees on paid leave or severance pay are considered “employed” in BLS data.
Assess the Current Job Market Conditions
Much of the uncertainty in the job market is related to federal policy ambiguity, which is discouraging companies from creating new job postings. “Our economy is constantly being hit with shocks, primarily from the White House,” Holzer explains. “Employers are hesitant because they don’t know if policies will last, leading to a holding pattern.”
Holzer adds that shifting tariff policies may already be affecting the retail industry, which has experienced some declines in recent months. This is also reflected in consumer confidence, which declined for months before increasing this May, but remains low enough to suggest a potential recession.
Kantenga also points out that the high unemployment rate for 22 to 27-year-olds is unusual. “Since the 1980s, recent graduates have typically had an unemployment rate around or below the overall rate,” Kantenga says. While college graduates still perform better in the job market than those without a degree, limited job mobility is reducing the number of available backfill positions.
According to Kantenga, elevated interest rates primarily affect tech, information, media, and professional services. “These are major industries that typically hire many new college graduates, but they have been slowing hiring for about three years…although LinkedIn data suggests that the tech and financial services sectors are stabilizing,” he says.
Andrew Challenger, senior vice president of Challenger, Gray & Christmas, Inc., a job cut tracking firm, notes that layoffs have been high in the first half of the year. “We anticipate more job cuts, which will likely lead to unsteady job reports,” he says.
Leverage Your Network Now
Experts suggest that the job market will likely worsen in the coming months, so job seekers should begin their search now.
“There’s often a desire to take some time off before starting a job, but it’s unlikely that the labor market will improve significantly in the next six to 12 months,” says Challenger.
Networking can ease navigation through the competitive labor market. “We consistently find that two-thirds of our clients secure jobs through professional and personal networking,” Challenger adds.
Market Yourself Effectively
Adapting to the current needs of the job market is also important. Kantenga notes that recruiters seek candidates with strong soft skills and the ability to use AI in the workplace.
“[Employers] may not have defined their AI strategies, but they want to hire individuals who can work with AI to ensure future success,” says Kantenga.
Kantenga also advises applicants to highlight relevant experience with specific examples. He notes that recruiters often cite a lack of qualifications among candidates, making the review process more difficult. “It may not be that candidates are unqualified, but rather that they are not effectively communicating their skills,” he explains.
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