{"id":244274,"date":"2025-09-21T16:33:10","date_gmt":"2025-09-21T16:33:10","guid":{"rendered":"https:\/\/www.europesays.com\/us\/244274\/"},"modified":"2025-09-21T16:33:10","modified_gmt":"2025-09-21T16:33:10","slug":"top-economists-and-jerome-powell-agree-that-gen-zs-hiring-nightmare-is-real-and-its-not-about-ai-e","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/244274\/","title":{"rendered":"Top economists and Jerome Powell agree that Gen Z’s hiring nightmare is real\u2014and it’s not about AI e"},"content":{"rendered":"

The dramatic rise in unemployment among Americans under 25\u2014especially recent graduates<\/a>\u2014has become one of the most troubling economic headlines of 2025. Recent insights from economists, central bankers, and labor market analysts signal that this appears to be a uniquely American challenge, underpinned by a \u201cno hire, no fire\u201d economy rather than solely by the rapid ascent of artificial intelligence.<\/p>\n

For many Gen Z workers, the struggle to land a job can feel isolating and fuel self-doubt. But that frustration recently got some high-level validation<\/a>: Federal Reserve Chair Jerome Powell echoed economists\u2019 concerns about the cooling labor market, telling reporters at his regular press conference following the Federal Open Market Committee that it\u2019s an \u201cinteresting labor market\u201d right now, adding that \u201ckids coming out of college and younger people, minorities, are having a hard time finding jobs.\u201d Noting a low job finding rate, along with a low redundancy rate, he said, \u201cyou\u2019ve got a low firing, low hiring environment<\/a>.\u201d and noting that it\u2019s harder than ever for young jobseekers to break in.<\/p>\n

While recent months have been dubbed by Deutsche Bank<\/a> \u201cthe summer AI turned ugly<\/a>,\u201d and some major studies find AI adoption disrupting some entry-level roles, Powell was less sure. AI \u201cmay be part of the story,\u201d but he insisted the main drivers are a broadly slowed economy and hiring restraint. Top economists at Goldman Sachs and UBS tackled the subject soon after and found Powell to be mostly on the money. This isn\u2019t an AI story, at least not yet.<\/p>\n

A deep freeze setting in<\/p>\n

According to a Friday analysis by UBS chief economist Paul Donovan, titled \u201cthe kids are alright?<\/a>\u201d the spike in U.S. youth unemployment stands in stark contrast to global trends and cannot be blamed on artificial intelligence despite the current fascination with automation in public debate. \u201cThe U.S. labor market experience is peculiar,\u201d he wrote. \u201cYoung Euro area workers have a record low unemployment rate. In the UK, the young persons\u2019 unemployment rate has fallen steadily. Employment participation by young Japanese workers is near all-time highs. It seems highly implausible that AI uniquely hurts the employment prospects of younger US workers.\u201d<\/p>\n

Goldman Sachs economist Pierfrancesco Mei wrote on Thursday that \u201cfinding a job takes longer in a low-turnover labor market.\u201d He argued that \u201cjob reallocation,\u201d or the pace at which new jobs are created and existing ones destroyed, has been on the decline since the late 1990s, albeit more slowly as of late. Almost all job changes between existing jobs is taking place as \u201cchurn,\u201d driving \u201calmost all the variation in turnover since the Great Recession.\u201d Goldman found that as of 2025, churn was well below its pre-pandemic levels, a \u201cbroad-based\u201d pattern across industries and states, and this \u201cmostly fall[s] on younger workers.\u201d In 2019, it took a young unemployed worker about 10 weeks to find a new job in a low-churn state, now that\u2019s 12 weeks on average.<\/p>\n

\"\"<\/p>\n

UBS\u2019 Donovan writes that \u201cit might be tempting to blame technology\u201d for the plight of the Gen Z would-be entry-level worker. \u201cMachines, robots, or computers replacing humans is an ever-popular dystopian scenario.\u201d Donovan concludes, similarly to Goldman that the U.S. pattern \u201cmore convincingly fits a broader hiring freeze narrative, affecting new entrants to the workforce.\u201d<\/p>\n

A blue-collar alternative?<\/p>\n

According to Donovan, this also has the benefit of explaining the smaller impact on less educated workers, with high school dropouts able to find full-time employment at a younger age than recent grads, and so they likely found work before the 2025 deep freeze set in. With college enrollment also in a long-term secular decline, trade employment is becoming increasingly popular with blue-collar entrepreneurs<\/a>, some of whom find themselves earning six figures and calling themselves boss while their peers become saddled with student-loan debt.<\/p>\n

Over the long run, recent college graduates are empirically hit the hardest during \u201cno fire, no hire\u201d periods. During the Great Recession, when entire industries froze hiring, college graduates between 2007 and 2011 were uniquely hit by a lack of open positions. Those graduates earned less than their counterparts who graduated during non-recessionary periods \u2014 effects that persisted for 10-15 years, according to a Stanford briefing<\/a>.<\/p>\n

The implications for Gen Z and minority jobseekers are severe. Experts warn of \u201cscarring effects<\/a>\u201d\u2014long-lasting damage to earnings, homeownership prospects, and wealth accumulation. History shows that starting a career during a downturn can result in lower wages and a steeper climb up the economic ladder. On Wednesday, Powell spoke of other factors reducing the labor supply, such as harsher immigration measures<\/a>; he also mentioned that minorities are having a harder time finding employment during the 2025 freeze.<\/p>\n

\u201cThe overall job finding rate is very, very low,\u201d Powell said. \u201cIf layoffs begin to rise, there won\u2019t be a lot of hiring going on.\u201d The AI question remains open, in the Fed chair\u2019s words. Saying \u201cthere\u2019s great uncertainty\u201d around how big an impact AI is having, he offered a perspective, almost a guess, that \u201cyou are seeing some effects [from AI], but it\u2019s not the main, not the main thing driving\u201d the youth unemployment picture. Still, \u201cthere may be something there. It may be that companies or other institutions that have been hiring younger people right out of college are able to use AI that more than they had in the past. That may be part of the story \u2026 Hard to say how big it is.\u201d\n<\/p>\n

Fortune Global Forum<\/strong> returns Oct. 26\u201327, 2025 in Riyadh. CEOs and global leaders will gather for a dynamic, invitation-only event shaping the future of business. Apply for an invitation.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"The dramatic rise in unemployment among Americans under 25\u2014especially recent graduates\u2014has become one of the most troubling economic…\n","protected":false},"author":3,"featured_media":244275,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[64,79,1597,3991,420,67,132,68],"class_list":{"0":"post-244274","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-federal-reserve","11":"tag-gen-z","12":"tag-jobs","13":"tag-united-states","14":"tag-unitedstates","15":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115243254276956825","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/244274","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=244274"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/244274\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/244275"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=244274"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=244274"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=244274"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}