As we head into the final quarter of 2024, the job market for college seniors and recent graduates is showing a mix of both hope and concern. On one hand, the economy created 142,000 new jobs in August 2024, with healthcare and construction sectors leading the charge.1 While this short-term improvement is promising, the overall picture reveals slow job growth, leaving many young professionals uncertain about their prospects.
Since 2020, the job market was characterized by intense competition among employers, who were eager to fill positions after the pandemic’s economic disruption. But that trend has recently cooled off. According to a survey conducted by the National Association of Colleges and Employers (NACE) in the spring of 2024, employers now plan to reduce hiring by 6% compared to last year. Industries such as finance, insurance, and real estate, which saw growth in previous years, are expected to decrease hiring by 14.5% this year.2
One factor contributing to this slowdown is the Federal Reserve’s policy of raising interest rates, which was implemented to control the soaring inflation of 2021. As a result, the cost of business expansion became less attractive, suppressing job creation, especially in high-paying roles. While inflation has decelerated dramatically over the past year, the Federal Reserve only recently approved a 0.5% interest rate cut in September 2024.3 Economists believe that this could potentially ease business costs and increase hiring opportunities for recent graduates in the near future, but the full effects are yet to materialize.
Consumer confidence has been impacted, falling from 105.6 in August 2024 to 98.7 in September. A score below 100 indicates economic pessimism, driven by factors such as fewer job openings, slower payroll growth, and uncertainty surrounding the upcoming U.S. presidential election. Economists believe employers may be hesitant to make large-scale hiring decisions until they have more clarity on the economic and political landscape.
The hiring slowdown also coincides with another troubling trend: ghost listings. These are job postings that remain visible but are not actively being filled by employers. According to economists Lisa K. Simon and Stephanie Hao, the ratio of completed hires to job postings has dropped significantly. In 2021, there were 8 hires for every 10 job postings; in 2024, that number has fallen to 4. Additionally, the share of job candidates who receive no response from recruiters has increased by 160% since 2018.
Moreover, a significant portion of recent graduates are currently “underemployed”. Data from the Federal Reserve Bank of St. Louis shows that 4 in 10 graduates are working in positions that do not require a college degree.4 This trend highlights the growing disconnect between the expectations of young professionals and the reality of the job market, as many are forced to settle for lower-waged, less specialized roles.
Despite the broader challenges, some industries remain favorable for new graduates. According to Gusto principal economist Liz Wilke, fields such as healthcare, legal services, nonprofit organizations, and arts and entertainment are still seeing increased interest in new hires. Graduates with skills relevant to these sectors are more likely to find opportunities, as these industries remain resilient. On the flip side, shrinking industries include technology, where companies have slashed thousands of jobs as they pivot to artificial intelligence. The finance sector is also seeing reduced hiring, reflecting the overall cautious approach businesses are taking in this economic climate.
For those entering the workforce, it’s important to be adaptable and consider industries that are still expanding. Leveraging platforms like Handshake and other online recruitment tools can improve job search outcomes. Negotiation remains key, and strong negotiating skills can help graduates secure better compensation.5
While the data reflects a challenging landscape, the long-term outlook may improve as interest rates stabilize, and economic conditions become more favorable. Graduates should stay informed, flexible, and persistent as they navigate the complexities of today’s job market.
[2] https://www.nytimes.com/2024/09/05/business/economy/jobs-college-graduates-unemployment.html
[4] https://www.cbsnews.com/news/jobs-hiring-college-grads-class-of-2024/ [1] https://joinhandshake.com/blog/students/what-percent-of-college-students-get-jobs-after-graduation/
[5] https://joinhandshake.com/blog/students/what-percent-of-college-students-get-jobs-after-graduation/
