In 2025, new college graduates wanted remote, high-paying jobs that aligned with their values. In 2026, they just want a job.
With 89% worrying artificial intelligence could replace entry-level roles – up from 64% last year – 67% of graduates now say they would accept a lower- paying position if it offered more job security, Monster’s 2026 State of the Graduate Report found.
“They do not want to be ‘the last one in, first one out’ of their new job,” Monster career expert Vicki Salemi said, adding that young people are noticing waves of corporate layoffs. “They really want to feel like they’re going to be in a job for the long term.”
An April 2 Challenger, Gray & Christmas report may have confirmed some of their fears. It found employers announced 60,620 layoffs in March – up 25% from February – with AI adoption the primary reason behind the cuts.
Overall, the U.S. economy added 178,000 jobs in March, the Bureau of Labor Statistics estimated April 3 – a figure well above forecasters’ expectations. This news comes after the revised jobs report for February showed a loss of 133,000 jobs. The return to work in March of about 31,000 striking Kaiser Permanente health care workers accounts for some of the rebound.
The unemployment rate ticked down to 4.3% in March from 4.4% in February.
Andrew Stettner, senior director of economic security at the National Employment Law Project, said the report is a positive bounce back from February, but that it doesn’t change the labor market’s overall “narrative.”
“We’ve had this slowdown in job creation in the economy, and that’s been particularly hard for people that have lost their jobs, and the kind of layoffs we saw last year, or young people coming out of high school and college,” Stettner said. “Even with this gain, we’re just averaging about 68,000 jobs per month this year, and that’s not enough to make up the ground that we really lost last year.”
‘Challenging time to enter’
The unemployment rate for recent college graduates ages 22 to 27 stood
at 5.7% in the fourth quarter of 2025, up from 5.3% in the previous quarter, according to the Federal Reserve Bank of New York’s latest data release. The age group’s underemployment rate, which tracks the number of graduates working jobs that usually don’t require a college degree, rose to 42.5% in the fourth quarter – its highest level since 2020.
Most 2026 grads are still optimistic they’ll land a job, with 79% saying they think it’ll happen within three months, the Monster report found. That’s down from 83% of 2025 grads who thought they would find an opportunity shortly after graduation.
Employers moving cautiously
Following a year in which the Bureau of Labor Statistics estimates U.S. employers added only 181,000 jobs throughout all of 2025, Powell said changes in federal immigration policy have brought down both the demand for and supply of workers. Uncertainty surrounding AI adoption and recession fears could be leading some companies to pump the brakes on hiring, but there are still some bright spots.
ADP’s April 1 National Employment Report found private-sector employment rose by 62,000 jobs in March, and that pay was up 4.5% year-overyear. Unemployment insurance claims stood at 202,000 in the week ending March 28, a decrease of 9,000 from the previous week, according to Labor Department data.
Hiring plans rose 157% in March to 32,826, up from 12,755 in February, according to the Challenger report. About 21% of those planned hires are for seasonal summer jobs. The report also found that private employers have announced plans to hire 6% fewer workers in the first few months of 2026 than they did during the same period in 2025.
“Employers are not pulling back in a meaningful way – they are moving more cautiously,” Christine Belmonte, The Planet Group’s president of technology staffing, told USA TODAY. “Hiring cycles are slightly longer, expectations are higher, and there is a clear focus on bringing in talent that can deliver immediate value. The emphasis has shifted from volume to quality.”
Too early to see war’s effects
Oil price surges resulting from the Iran war have pushed up gas prices and inflation expectations. The conflict has made the U.S. labor market “more vulnerable, but any impact will take some time to materialize,” according to Oxford Economics’ lead economist Nancy Vanden Houten.
James McCann, a senior economist at Edward Jones, agreed.
“Higher energy prices, and uncertainty over the Iran conflict, could push firms to pull back on hiring, and maybe even drive layoffs in the most affected sectors,” McCann said in a note to USA TODAY, adding that it’s likely too early to see effects in March data. “We would need to see a larger and more prolonged energy price spike to drive a meaningful labor market deterioration.”
Auto industry leads hiring plans
According to the Challenger report, the automotive industry leads all others in hiring plans so far in 2026, with intentions to hire 12,258 workers. The entertainment and leisure sector followed closely behind, with plans to hire 8,261.
In March, health care returned to its role as a reliable engine of job growth, following the end of the Kaiser strike. It added 76,000 jobs, the Bureau of Labor Statistics estimated. Construction added 26,000, transportation and warehousing added 21,000, and the social assistance sector added 14,000 jobs.
The federal government shed 18,000 additional jobs, and employment in the financial activities sector dropped by 15,000 in March.
Employment in other industries – including manufacturing; professional and business services; and leisure and hospitality – changed little, the Bureau of Labor Statistics said.
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