Putting the fries in the bag

And other remarks about the new-grad job market.

Broadly, the U.S. labor market appears steady. Despite the tariff talk, restructuring, and a slowdown in deals, labor seems relatively fine. May’s unemployment rate was 4.2%, around the same as it was a year ago and within a healthy range.

However, there has been a lot of talk about the struggles faced by new graduates and interns. It’s intern season right now, so New York and the Bay are full of fresh faces in even fresher button-ups and vests.

The unemployment rate for recent college graduates indeed ticked up to 5.8%, a level not seen since 2013. This time last year, it was 4.5%. The gap between recent grads and all workers is also hitting record highs, signalling that new grads are taking the brunt of whatever this is. Anecdotally, tons of people espouse their troubles landing internships and full-time jobs.

A quick scroll through X or Reddit reveals countless Sankey diagrams with absurd numbers of applications. You’ll also hear the blame being placed on several parties: artificial intelligence, immigrants, Trump, etc. People are also responding by going back to school, with law school applications up by 21% this year.

Even “safe” fields are feeling the pressure. The unemployment rate for computer science is currently 6.1%. I’m sure everyone also remembers the St. Louis FRED graph.

As for other white collar industries, they’re less affected, but something’s still going on. McKinsey took out some domain experts, PwC is cutting positions for the second year in a row, and there are whispers that banks could be next. Never mind that acceptance rates for intern or new grad positions for many of these top firms are sub-5% to begin with.

For those who don’t come from an elite target school or have nepotism to fall back on, the struggle certainly seems real. Well, even Yalies are feeling it. Entry-level hiring is down across the board, and prominent majors are seeing increased competition.

Trouble for whom?

First, it’s worth grouping out this issue to people of different skill levels and in different industries to see if there actually is a pressing employment problem for the top of the talent pool. If this is a case of the bar being moved upward, preventing middle-of-the-pack folks from employment, that is a separate issue from whether or not firms are clamping down on new talent altogether. If true, this might point to an increasing skill gap in the younger generation rather than the labor market being unfavorable. I’ll be looking at outcomes and job placement reports for the class of 2024 (2025 hasn’t been compiled yet at the sources I’m reviewing).

Starting with my university, 98.5% of responding Duke seniors graduating in 2024 are employed, getting more education, joining the military, or doing volunteer work. 77% are employed full-time. Of the employed, 47% are heading to finance, tech, or consulting. The most common non-Duke employers are Capital One, Microsoft, Goldman Sachs, Meta, and Bain. Looking at economics majors, 93% are working full-time. Bulge bracket banks top the list with some boutique private equity, asset management, and consulting splattered about. For computer science majors, 88% are working full-time, with the expected big tech names taking up top spots. For reference, English goes down to 70%, history to 57%, and philosophy to 40%, interrupted by the small sample of people that primary these as majors.

At Harvard, 88% of respondents are working, going to school again, or joining a fellowship (10%? Wow!). About 58% will head to the workforce, with about half of them joining one of the coveted three industries. The Crimson has a breakdown by family income and, interestingly, a greater portion of higher-income students opt for finance than lower-income students. Academia and research are (maybe surprisingly) more popular for low and middle-income students. For Stanford GSB, 88% of students received a job offer with a median salary of $185,000. Of those jobs, 73% were in one of the three main industries.

This is an interesting picture. At the undergraduate level, a large chunk of people head straight into the workforce for very prestigious roles. Some portion continue their education, as expected. Of course, the most immediate critique is that these are just surveys, and people can not respond or even lie. Even with that caveat, sub-~7% of people from top schools don’t have immediate employment or educational opportunities. Compared to the overall rate, this is low given that some portion will be on a gap year for further education or spend a year applying for jobs.

From my friends, the vast majority are employed this Summer in a desired field or have their 2026 offers in hand. A few are waiting for consulting recruiting to get started, but banks and big tech seem to be plenty. As for the very high-end quant finance, a fair chunk of people I know have found roles with their backup being the rest of big tech. The top portion of the talent pool isn’t excessively struggling. They might not land their dream firms, but they can certainly find employment. I don’t particularly buy the theory that white-collar industries were hit hard. At least, not hard enough to stop hiring credibly skilled new graduates. Big tech headcounts have been flat since 2021, instead of exponentially growing in the years prior, though there’s still room for internships and new grads. As for quant firms, they’re growing fast and making money like crazy. Jane Street went from 2,000 employees in 2023 to over 3,000 now. Other companies like HRT and Optiver also have double-digit percentage headcount increases every year. If you’re sufficiently talented, the best of the best are hiring more and more.

The average college graduate

There is room for concern that the average college graduate is finding trouble, however. There are two factors at play: how qualified the average college graduate is and how good the alternative to hiring them is.

The average college student in a competitive field probably isn’t all that skilled, talented, or smart. They likely selected their major and industry not out of interest, but after seeing the high pay of the top ladder. The other component for jobs is that the average firm in a white-collar industry also isn’t doing too well.

Middle-market dealflow in 2025 took a large hit. If you’re an average finance or econ major who isn’t even applying to Blackstone or Carlyle, your choice of companies hiring new talent is slim. Internship postings are also down overall on Handshake, an internship/jobs website for college students, mainly populated by ‘average’ type firms.

In line with political and social trends, companies are also cutting back DEI talent programs. Top white collar firms a year or two ago had dedicated applications or sophomore internships aimed at underrepresented talent, many of which have been scaled down or cut entirely this year.

The phrase “average” is doing a lot of work here to explain the difficulties that most people feel around entry-level positions. The average computer science major might not know what Git is. Likewise, the average finance or econ major might have difficulties explaining a leveraged buyout model or the theory of asset valuation. More people are going to college who are interested in these careers than ever before. There are also very few people pointing out the possibility that the skill and talent distribution is getting very lopsided. Indeed, the college wage premium is stagnating, a sign that a college degree alone isn’t some career golden ticket.

Immigrants and AI

Let’s go over two more theories behind the current labor environment for new grads.

As for immigrants, the H-1B cap has been 85,000 per year since 2006. Anecdotally, international students bemoan the difficulty of finding internships and full-time jobs because visa issues are a pressing problem. Employers don’t want to hire an intern, spend time and money training them, only for them to be kicked out of the country in a few years.

The number of H-1B visa applications has increased for the four companies selected, but as a capped lottery, it’s difficult, if not impossible, to argue that there is a causal effect on the hiring process of native-born applicants. However, because these applications are sent after someone has gone through the hiring process, it’s possible that some are displaced, but a company can always draw from a waitlist. This doesn’t explain the most recent increase, partly because 2025 data isn’t out yet and partly because there has been a subtle decline in applications since 2022.

Also, making this point a little more moot, international students are likely to be above average compared to domestic students. It’s harder for them to get into American universities and there’s a chip on their shoulder for them to do well in school/career. While I couldn’t find any notable papers comparing university GPAs, my intuition says that major GPA for international students is likely higher than that of domestic students. Contrary to the X post from the start, I don’t think there’s information to suggest that an influx of international students or immigrants is significantly contributing to post-grad job difficulties.

What could be more of a concern is the idea that artificial intelligence is putting pressure on entry-level jobs. In white-collar roles, new analysts are mainly synthesizing information and making reports or decks, potentially automated to some degree by generative AI.

Firms like Morgan Stanley and BigLaw Paul Weiss are experimenting with generative AI products. Should they prove effective, fewer analysts or paralegals may be hired in the coming years. Some are warning that this could be a white-collar bloodbath. The CEO of Anthropic, which makes Claude, recently said that AI could take out half of entry-level jobs. Of course, this effort to scaremonger also pushes more companies to use generative AI, helping out companies that make AI products.

While it’s true that new graduate and internship hires at big tech companies have slowed down and tech CEOs have said that 30% of their code is now written by AI, I’m not convinced that there’s a direct link. Macro effects are taking up a large part, worsening the situation for average graduates. In addition, Fed surveys say that most companies don’t expect hiring changes because of AI. New technology can change a lot, but major labor force effects have yet to be seen.

Big news for the unemployed

There’s a lot of fear for new grads and college students right now. I think most of it is overblown. Companies are still hiring and people need to upskill to qualify. This is nothing new.

Other than the government slashing a bunch of internship programs across the branches for political reasons, most college students will be fine when they enter the labor force. Everyone is always looking for bright talent or 100-hour spreadsheet toilers. Keep your head up, study for your interviews, and get that offer letter.