Entry‑level market tightens

New college graduates in the United States are taking longer to find work, and the squeeze is sharpest in the kinds of junior tech jobs that once served as the first rung. (newyorkfed.org) (signalfire.com) The Federal Reserve Bank of New York said the unemployment rate for recent college graduates rose to about 5.7 percent in the fourth quarter of 2025, up from an average 5.3 percent in the third quarter. Its underemployment rate — graduates working in jobs that typically do not require a degree — hit 42.5 percent, the highest level since 2020. (newyorkfed.org) In tech, SignalFire said new graduates accounted for just 7 percent of hires at large technology companies in 2025 and under 6 percent at startups. The firm said big technology companies cut new-graduate hiring by more than 50 percent from 2019 levels, while startups were down more than 30 percent from 2019. (signalfire.com) That drop followed another pullback in 2024. TechCrunch, citing SignalFire data, reported that large technology companies hired 25 percent fewer new graduates in 2024 than in 2023, while startup graduate recruiting fell 11 percent. (techcrunch.com) The entry-level market has tightened even as the broader labor market kept adding jobs. CNBC reported on April 6 that the overall unemployment rate was about 4.2 percent in late 2025, below the 5.7 percent rate for recent graduates. (cnbc.com) (newyorkfed.org) Employers and recruiters have tied part of the shift to artificial intelligence, which can now handle more routine coding, research, debugging, and document work that used to be assigned to junior staff. TechCrunch reported that SignalFire researchers see “convincing evidence” that artificial intelligence is a significant factor, while also noting it is not the only explanation. (techcrunch.com) Other forces are also cutting openings. SignalFire pointed to smaller funding rounds, leaner teams, and fewer formal new-graduate programs, especially after the hiring boom and layoffs that reshaped the industry from 2022 through 2024. (signalfire.com) The result is a market where graduates are competing for fewer clearly labeled starter jobs and more employers are favoring workers who can contribute immediately with less training. SignalFire said hiring recovered in 2024 for midlevel and senior roles even as the decline deepened for new graduates. (signalfire.com) That leaves many graduates facing a harder version of the old promise that a degree would open a door quickly. The New York Fed still says college remains a good long-term investment, but its latest data show the first step into the labor market has become markedly harder. (newyorkfed.org)