Why Is the Job Market So Bad in the US Right Now?

You’ve done everything right. You earned a degree, updated your resume, and sent out dozens of applications. And still, no replies, no interviews. Just the sinking feeling that something’s off.

Or maybe you’ve been working for years, only to get laid off or burned out. Now you’re back in the search, wondering why landing a job suddenly feels harder than ever.

So many people are stuck refreshing job boards, getting ghosted by recruiters, and questioning their worth. It’s not laziness or lack of effort. The job market is going through a rough patch, and job seekers are seeing the consequences. 

Let’s break down why the U.S. job market feels so brutal right now and what’s going on beneath the surface. This guide will cover:

• The current state of the US job market. 
• Why the job market is so bad right now.
• If and when things will start looking better. 

How Is the US Job Market Right Now?

On paper, things aren’t great, but they could be worse.

According to the Bureau of Labor Statistics (BLS), the unemployment rate stayed at 4.2% in April 2025. That’s higher than 2022 and early 2023 (around 3.5%), but doesn’t come close to the rates during the pandemic or past recessions. Nonfarm payroll employment also grew by 177,000 last month, which is in line with the average monthly gains over the past year.

But the number of job openings tells a different story. There were about 7.2 million open positions in March (basically flat from the month before), but that’s down by nearly a million from the same time last year. 

Indeed also recognizes the gradual decline of job openings since 2022 in their most recent US Labor Market Trends report: 

Employers aren’t letting people go like they were during the pandemic or the Great Resignation, but they’re also hesitant to bring on new people. This is largely due to uncertainty surrounding the current economy and political landscape. 

And we’ve all heard about the waves of layoffs and hiring freezes in the federal government, only adding to the job market disruption. The BLS reported that government employment dropped by 9,000 in April, and is down by 26,000 since January. 

It’s no surprise that people’s confidence is taking a hit. ZipRecruiter’s Job Seeker Confidence Index dropped by 3.6 points in early 2025, wiping out gains made at the end of last year. Only 13% of job seekers say their search is going well, and a record 41% say they’re pessimistic about job availability.

Recently lost your job? Take a look: How to Survive a Layoff

Why Is the Job Market So Bad?

It’s not easy looking for work right now, but don’t take it personally. Many are feeling stuck, disheartened, and straight-up confused about what’s going on with the job market. And there’s no single reason for this frustrating stalemate. From degrees that don’t open doors, to companies dragging their feet or not even hiring at all, there’s a lot behind this sluggish market. 

Let’s break it down.

A degree isn’t the golden ticket anymore

Remember when everyone told us going to college would guarantee a decent job? Well, that’s not true anymore. These days, the job market is overflowing with degree-holders, and competition is fierce. While the recent graduate unemployment rate of 15.3% hasn’t changed much from last year, it’s still getting harder to bag those desirable positions.

And with all that student debt, what’s the solution? Take what you can get. Research shows that over half of college grads work in jobs that don’t require a degree, and three-quarters of them stay in these jobs for up to ten years. 

Many graduates are sharing how they’re struggling to even get an interview: 

But the issue isn’t just the number of degree-holders competing for the same jobs. Companies are shifting toward skills-based hiring. A huge 81% of corporate leaders say they prioritize skills over degrees when hiring. And when finding freelancers, 74% say a degree is irrelevant — they care more about experience (not easy when you can’t even land your first job).

It’s a system that hasn’t delivered on its promises. Many grads are paying off student loans while taking jobs they’re overqualified for, simply because they can’t get their foot in the door. But knowing this can help shift your job search strategy. It’s less about what’s on paper and more about your skills and what you can do.

Fresh out of college? Make sure you know your worth: Average Salary of a College Graduate

The tech industry is shifting 

It’s wild to see how tech went from being full of opportunity to one of the most turbulent corners of the job market. How did we get here? During the pandemic, tech companies went on a hiring spree, assuming remote work and digital services would keep growing at lightning speed forever.

Once things stabilized, these same companies realized they had overhired. Now they’re trying to correct course with tech layoffs, hiring freezes, and cutting once essential jobs.

Mark Zuckerberg confirmed this with a message to his Meta employees:

At the start of Covid, the world rapidly moved online, and the surge of e-commerce led to outsized revenue growth. Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended. I did too, so I made the decision to significantly increase our investments. Unfortunately, this did not play out the way I expected.

According to Layoffs.fyi, over 150,000 tech jobs were cut in 2024 alone, and the layoffs have continued into 2025, with over 22,000 already slashed this year. That kind of volume can ripple out across the entire industry, making it harder for new grads or career switchers to break in.

But the tech industry isn’t slowing down — in fact, employers say they’re struggling to find workers who can keep up. Revature’s 2025 State of IT Skills Survey Report found that 84% of employers are worried about finding the right tech talent, with the majority (71%) claiming the biggest challenge is finding those with the necessary skills.

AI is reshaping the whole game

Artificial Intelligence is doing more than summarizing meeting notes and writing college essays. The 2025 Future of Jobs Report found that 60% of employers expect AI to transform their business by 2030. And yes, that means AI will eat up jobs in industries like customer service, transportation, and programming — but it’s also creating new roles.

However, these new roles often require higher-level digital or analytical skills, which puts pressure on job seekers who don’t have that background or access to upskilling opportunities. It’s especially tough on older workers or communities that missed out on tech education.

And if you can’t work with it, you could risk getting replaced altogether:

That said, jobs aren’t vanishing as much as they’re transforming. The challenge is staying ahead of the curve. Unless you’re bringing something uniquely human, I suggest investing in your skills and thinking about how to work with AI instead of fearing it’ll replace you. 

Economic and political uncertainty is slowing hiring

Since the Fed started raising interest rates in 2022 to fight inflation, businesses have been bracing for a possible recession. And what do companies do when they’re scared about the future? They cut back on spending — and that includes hiring. 

Even in 2025, inflation still lingers, interest rates are high, and many industries are cautious about expanding. And with the outcome of the 2024 presidential election still fresh, companies are unsure which direction policies will take. All this unpredictability makes employers pump the brakes on new hires, big projects, or opening new offices.

On top of that, there’s all the talk of tariffs and international trade tensions. If you’re a business leader and don’t know what your costs will look like six months, are you going to commit to hiring a whole new team? Probably not.

The 2025 Future of Jobs Report asked employers how economic uncertainty affects their businesses. Here’s what they found: 

• 34% see heightened geopolitical tensions and conflicts as a key driver of organizational transformation. 
• 23% of organizations identify increased restrictions on trade and investment as factors reshaping their operations.
• 42% expect slower economic growth to impact their operations.

When companies don’t hire, job openings drop, but the number of people looking keeps rising. That puts more competition on fewer jobs, and things start to bottleneck. Even well-qualified job seekers can find themselves in long holding patterns, waiting for businesses to make a move.

Check out the safest industries in economic uncertainty: 10+ Recession-Proof Jobs

The hiring process is way too slow

If it feels like applying for jobs takes forever these days, you’re not imagining it. Back in 2022, job openings reached record-highs, with companies so desperate to hire that they were throwing out job offers after a single interview. Now? Not so much. 

We’re now being dragged through an endless list of steps: online applications, skills assessments, personality tests, video interviews (sometimes talking to a bot), phone calls, panel interviews, and on and on. And that’s assuming you don’t get ghosted somewhere in between.

A lot of this is because companies are playing it safe. No one wants to be blamed for a “bad hire,” so they build out these multi-layered processes, hoping to find the perfect candidate. But all it does is slow things down and leave applicants hanging. 

Here’s what someone in HR said about why the hiring process is so long:

Companies are dragging their feet because they can. With more people applying and fewer openings, there’s no pressure to rush decisions — and unfortunately, that hurts job seekers the most.

Keen to get the ball rolling? Find out more: How to Apply to 3x More Jobs

Ghost jobs are wasting everyone’s time

Ghost jobs are listings that look legit but aren’t. Either the company isn’t really hiring, or the position already has an internal candidate in mind. Sometimes, the job doesn’t exist at all.

And it’s more common than you think. According to a recent survey, 40% of employers admitted to posting fake jobs. Why? Reasons include making it appear like they’re growing, building a resume database, or keeping internal staff feeling replaceable. 

This is what an HR employee said when asked about posting ghost jobs:

Some government agencies and large corporations post jobs just to meet diversity hiring rules, knowing full well the role’s already spoken for. With hundreds of people applying to every opening, it’s easy for companies to go quiet. They don’t owe anyone a response, and ghosting candidates has annoyingly become normal.

This is obviously hugely demotivating for job seekers. You could spend hours on applications that were never going anywhere. The best thing you can do is focus on roles that show signs of actual activity, such as recent posts, personalized outreach, or multiple job openings in one department.

When Will the Job Market Get Better?

Right now, we’re in a transition period. According to the World Economic Forum’s Future of Jobs Report, the labor market is expected to shift a lot between now and 2030. They’re predicting that nearly a quarter of all current jobs will be impacted — some disappearing, some being created, and many simply changing. 

We’re looking at a potential gain of about 78 million jobs globally by 2030. But that’s not happening overnight, and it comes with a catch. Nearly 40% of the skills people use in their current jobs will need updating or replacing, meaning most of the workforce will have to adapt.

In the U.S., much of the hesitation around hiring has to do with economic and political uncertainty. For example, we expect federal hiring to keep slowing down throughout 2025 as the government extends the hiring freeze. Combined with changes to immigration policies, new tariffs, and shifts in taxation, you have a lot of companies holding their breath. 

Job growth often picks up when businesses feel optimistic about demand, stability, and the economy. Right now, they’re cautious. Rising costs, political shifts, and global instability make employers hesitant to make long-term commitments, like adding new people to the payroll.

So what can you do in the meantime? Focus on adaptability. The more you can align your skills with where demand is heading, such as tech, data, AI tools, or frontline roles that can’t be automated, the better positioned you’ll be when the market turns around. 

Final Thoughts 

Between the flood of degree-holders, the shift to skills-based hiring, the slowdown in tech, the rise of AI, political uncertainty, and drawn-out hiring processes, it’s a perfect storm that’s left many job seekers in application hell. That’s not a reflection of your worth; it’s a sign of the system in flux.

We are in a period of major change. The kinds of jobs, the skills in demand, and the way companies hire are all evolving fast. But what you do now can set you up to come out stronger on the other side. That means learning something new, networking smarter, or even giving yourself grace during this time. The market will shift again — and when it does, you want to be ready to move with it.

FAQ

What is the job market?

The job market is the give-and-take between people looking for work and employers looking to hire. It’s where supply (job seekers) meets demand (job openings). The market changes based on the economy, technology, and even politics. When there are lots of job openings and fewer applicants, it’s a “tight” market. When it’s the opposite, with too many applicants and not enough jobs, it gets competitive fast. 

Why is the job market so competitive?

Right now, more people are looking for jobs than there are roles available, especially in fields like tech and business. On top of that, many job seekers have similar credentials, like college degrees, so it’s hard to stand out. Some companies are also being extra cautious with hiring due to economic uncertainty and budget constraints. Plus, the rise of remote work and online applications means each job opening can attract hundreds (even thousands) of applicants from across the country. 

Is it an employee market?

An “employee market” is when job seekers have the upper hand because companies are desperate to hire. That was the case in 2021 and early 2022. But in 2025, we’re in more of an “employer market.” There are fewer open roles, hiring is slower, and businesses can afford to be picky. Some companies are even ghost posting jobs they don’t intend to fill, just to keep up appearances. So job seekers don’t have a lot of leverage right now, and that makes the hunt even tougher.

Why does the job market change over time?

The job market changes over time because technology evolves, economies shift, politics change, and so do people’s needs and priorities. For example, economic booms lead to more hiring, while recessions slow everything down. Policy changes, like new tariffs or immigration laws, can also impact who gets hired and where. Even global events can completely reshape how and where we work. 

Why is no one hiring?

It’s not that no one is hiring, it’s that many companies are hiring less. After the chaos of the pandemic, employers have pulled back. Some overhired during the remote work surge and are now cutting back, especially in tech. Others are holding off because they’re unsure about the economy, possible policy changes, or rising costs. Add to that slower business growth and fears of a recession, and you get fewer job listings and longer hiring timelines. 

What’s the unemployment rate of college graduates?

The college graduate unemployment rate is currently 2.5% for those with a bachelor’s degree or higher, according to the U.S. Bureau of Labor Statistics. This is a slight increase from the same time last year in April 2024 and 2023, when the rate was 2.2% and 1.5%.