The Gen Z job market in 2026 is harder for new graduates than for workers as a whole, but it is not the collapse many headlines describe. The New York Fed puts unemployment for recent college graduates, aged 22 to 27, at about 5.6% in the second quarter of 2026, and their underemployment at 42%. Both are worse than a few years ago. Yet iCIMS reported entry-level openings up 18% in April 2026, and the employers NACE surveyed planned to hire 5.6% more Class of 2026 graduates than the year before. This post sets those numbers side by side, explains what each one measures, and ends with a plan for a first job search built on the parts of the data that hold up.
A quick definition first. Pew Research Center draws the line at 1997: "anyone born from 1997 onward is part of a new generation", the one it calls Gen Z. In 2026 its oldest members are about 29, so the New York Fed's 22 to 27 recent graduate group sits entirely inside it.
The numbers for recent grads
The best single source is the New York Fed's Labor Market for Recent College Graduates, built from Census Bureau and Bureau of Labor Statistics survey data. Its 2026:Q2 summary reads: "Labor market conditions remained challenging for recent college graduates through the second quarter of 2026. The unemployment rate stayed elevated at about 5.6 percent, and the underemployment rate edged up to 42 percent."
The Fed publishes the monthly series behind its charts, smoothed with a three-month moving average. Here is June 2026 against June 2019, before the pandemic:
| Group (not enrolled in school) | June 2019 | June 2026 |
|---|---|---|
| Recent college graduates, 22 to 27 | 4.3% | 5.7% |
| Young workers, 22 to 27, no bachelor's degree | 5.9% | 7.2% |
| All college graduates, 22 to 65 | 2.2% | 2.9% |
| All workers, 16 to 65 | 3.5% | 4.1% |
Three things stand out.
Recent graduates now trail the overall market, which is unusual. We counted the months in the Fed's downloadable series, which starts in January 1990. Recent graduates had a higher unemployment rate than all workers in only 91 of 438 months, and every one of the months since January 2021 is among them. For most of the last 35 years a new degree meant a lower jobless rate than the average worker had. Since 2021 it has not. The widest gap came in April 2025, at 5.8% against 4.0%.
A degree still helps. People the same age without a bachelor's degree had higher unemployment, 7.2% in June 2026. The Gen Z story is not that school stopped paying off. It is that the first step after school got harder.
The latest monthly data is mixed. The Bureau of Labor Statistics September 2026 jobs report shows unemployment for everyone aged 20 to 24 at 8.0%, down from 9.2% a year earlier but up from 7.1% in August, against 4.2% for the whole labor force. Monthly youth figures swing a lot, so read the trend rather than any one month.
For the wider picture, including openings, hires and quits, see is the job market bad right now.
Entry-level openings versus applications
Here the data runs against the gloomiest headlines. iCIMS, an applicant tracking system vendor, reported in its May 2026 workforce insights that "In April, entry-level openings were up 18%, driven by increases in manufacturing and retail", while entry-level applications were down 9% and hires rose just 3%. Across all roles, openings hit a 12-month peak, 15% above a March 2025 baseline, while application volume dropped 10%, and the average was 31 applicants per open role.
| iCIMS, April 2026 | Change |
|---|---|
| Entry-level openings | up 18% |
| Entry-level applications | down 9% |
| Entry-level hires | up 3% |
| All openings, against March 2025 | up 15% |
| All application volume | down 10% |
Two cautions. iCIMS measures its own customers, drawn from "more than 3 million global platform users and more than 691 million candidate profiles", not the whole economy, and the release does not say what period the 18% is measured against. Other platforms show the opposite trend on their own data. Ashby reports 291 applications per hire in early 2026 and Greenhouse 244 applications per job in 2025, both far above their 2021 and 2022 levels, as covered in how many applications it takes to get a job. LinkedIn says US applicants per open role have doubled since spring 2022.
Both can be true. Ashby and Greenhouse measure applications per hire or per job on their own customers, while iCIMS measures total volume on its platform, and its growth in entry-level openings came from manufacturing and retail. Our reading: the entry-level jobs being added are not always the ones most graduates are applying for, so the crowding a graduate feels on a software or marketing posting can coexist with a rise in entry-level openings overall.
The iCIMS survey of 1,000 US job seekers shows how this feels from the inside. Among entry-level seekers, 54% believe employers now expect mid-level experience for entry-level roles, and 48% named "not hearing back after applying" as their top frustration. Those are perceptions, not measurements, but the silence is real enough to plan around.
What about AI
The strongest evidence so far is a Stanford working paper, Canaries in the Coal Mine? by Erik Brynjolfsson, Bharat Chandar and Ruyu Chen (August 2025). Using ADP payroll records, it found that "early-career workers (ages 22-25) in the most AI-exposed occupations have experienced a 13 percent relative decline" in employment, even after controlling for firm-level shocks, while more experienced workers in the same occupations held steady or grew. The authors call it early evidence.
The New York Fed's table by major points the same way for computing. In 2024 data, recent computer engineering graduates had 7.8% unemployment and computer science graduates 7.0%, among the highest of 74 majors. AI is a plausible part of that, though the paper itself does not test it by major. Meanwhile 78% of entry-level seekers in the iCIMS survey believe AI and automation are changing the volume and nature of entry-level roles.
Underemployment
The New York Fed's definition is simple: "A college graduate working in a job that typically does not require a college degree is considered underemployed." A job counts as a college job if at least half the people in it say a bachelor's degree is needed.
For recent graduates the rate was 42% in mid-2026, against about 34% for all graduates aged 22 to 65. That sounds alarming, and it is a lot of people. But the series shows it is not new. In our reading of the Fed's data, recent graduate underemployment was about 41% in June 2019, peaked near 48% in November 1992, and bottomed out near 37% in April 2001. Roughly two in five new graduates starting in a non-degree job is close to the long-run normal, and it has drifted up only slightly since 2024.
Major matters far more than year. From the Fed's outcomes by major table, based on 2024 data:
| Major | Unemployment | Underemployment |
|---|---|---|
| Nursing | 2.1% | 12.8% |
| Civil engineering | 2.3% | 15.6% |
| Computer engineering | 7.8% | 15.8% |
| Computer science | 7.0% | 19.1% |
| Finance | 2.8% | 27.8% |
| Economics | 3.5% | 33.1% |
| Psychology | 5.0% | 48.3% |
| General business | 4.3% | 50.4% |
| Communications | 3.9% | 53.0% |
| Performing arts | 7.0% | 63.9% |
| Criminal justice | 3.6% | 65.8% |
The two measures can point in opposite directions. Computer science graduates had high unemployment but low underemployment: fewer found work, but most who did landed degree-level jobs. Criminal justice graduates had low unemployment and the highest underemployment in the table. Read your own major on both.
The Fed adds a useful note: "Many underemployed college graduates actually work in 'non-college' jobs that are fairly skilled and well paid, and transition into better roles after gaining some work experience." A first job below your degree is common, and it is often a step rather than a trap.
What employers say they will hire
The National Association of Colleges and Employers surveys employers twice a year. Its spring 2026 update found: "Employers expect to increase their new college graduate hiring from the Class of 2026 by 5.6%". Employers with more than 5,000 employees planned an 8.7% increase, and more than a third of respondents planned to add hires. NACE's president, Shawn VanDerziel, said the rise "follows two years of lackluster job markets for new college graduates."
The outlook improved between surveys. In the fall, only a quarter of respondents planned to increase hiring, and NACE says the fall projection was -2.4% measured as a median (it was first reported as a mean, at 1.6%). The spring update switched to the median "to mitigate skewed results caused by outliers."
Details that help a job seeker:
- Where: NACE lists information, engineering services, wholesale trade, construction and miscellaneous professional services among the industries increasing hiring. iCIMS credits manufacturing and retail for its entry-level growth.
- Who: large employers planned the biggest increases.
- Why: employers cited company growth and succession planning.
- Internships: a separate NACE study found employers expected to hire nearly 4% more summer interns. The internship guide sets out when programs open, industry by industry.
Keep the sample in mind. The spring survey had 185 respondents, ran from February 12 to March 17, 2026, and was sponsored by Jobscan. These are plans, not hires. iCIMS's measured entry-level hires rose 3% in April, well short of its 18% rise in openings, so employers adding roles has not yet turned into graduates filling them at the same pace.
A plan for a first job search
The data points to a market that is crowded in some fields and open in others, slow to respond, and still rewarding of a degree over time. A plan that fits it:
- Check your major on both measures. Look up your field in the Fed's table. High unemployment with low underemployment (computing) means the degree jobs exist but are contested, so expect a longer search. High underemployment (many business, communications and social science majors) means you should target roles where the degree is actually required, and treat a non-degree job as a bridge.
- Follow the openings, not only the brands. NACE and iCIMS both name growing industries, and large employers planned the biggest increases. Search those sectors for analyst, operations, sales and engineering titles as well as the household names everyone else is applying to. Students still in their first or second year can also look at programs with their own windows, such as the Microsoft Explore internship.
- Use the channels that answer. In Huntr's 2025 report, users' applications moved to an interview or later stage at 5.1% on Handshake and 11.3% through Google Jobs, against 3.1% on LinkedIn. Only 27.5% of its survey respondents said LinkedIn Easy Apply led to even one interview in 2025. If Handshake is new to you, is Handshake legit covers what it offers and the scam postings that get through.
- Get referrals early. A New York Fed staff report found referred applicants "more than twice as likely to be interviewed" as job board applicants. Alumni, former internship managers and professors count. Our job search strategy guide shows how to run referrals alongside applications.
- Tailor each application. Huntr found tailored resumes converted to an interview or better at 5.8% against 3.73% for untailored ones. The data is observational, so treat it as a strong hint rather than proof. Count internships, research, campus jobs and serious projects as experience, since 54% of seekers in the iCIMS survey believe entry-level roles now expect more of it. These first job resume samples show the sections that replace a work history.
- Plan for silence and measure. Huntr's median user sends about 16 applications a week. Track applications and first interviews, compute your interview rate after 30 to 50 applications, and change your targeting if it sits near zero.
- Take the bridge job if you need it. The Fed's note on underemployment is the reassuring part of the data: many graduates move from a non-college job into a better role once they have some experience.
If sending that volume by hand is the bottleneck, ApplyEze is one way to do it. It is a desktop app that applies from your own machine on 12 applicant tracking systems, with a resume written for each posting and a cover letter when the form asks. New accounts get 50 free credits, once per email address with no card, and a credit is used only when an application is confirmed as submitted. List prices are Starter at $19 a month for 700 applications and Pro at $99 a month for 3,000. Your employers, job titles, dates, schools, degrees and certifications come from your own record. ApplyEze brings the posting's named skills and tools onto your skills line, even when your own record does not list them. There is no step to remove one before a live run, so use a dry run to see what it writes, and be ready to discuss anything on the page.