The data conflict on trajectory. The New York Federal Reserve reported recent-graduate unemployment at 5.7% in Q4 2025, up from 5.3% the prior quarter, with underemployment at 42.5%—the highest level since 2020. Graduate confidence in quick employment fell to 79% in 2026, according to Kelly Services. The National Association of Colleges and Employers projects a 5.6% hiring increase for the Class of 2026, suggesting modest recovery ahead.
Attorneys advising employers on entry-level hiring should note the persistent skills gap, particularly around AI competency. Work experience more than doubles job-landing odds, and 88% of employed graduates credited networking—a signal that traditional recruitment channels remain critical even as AI disruption reshapes hiring practices. The underemployment rate warrants attention: graduates are working, but often in roles below their qualifications, which may affect retention and long-term workforce planning.