Federal Reserve Chair Jerome Powell has sounded the alarm on what many recent graduates already know—getting a job right out of college is really hard right now. Speaking at his regular press conference following the Federal Open Market Committee meeting, Powell called it “an interesting labor market.” He said people “kids coming out of college and younger people, minorities, are having a hard time finding jobs.” Overall, the “job finding rate” is very low, Powell said, but then again, so is the layoff rate. “So you’ve got a low firing, low hiring environment.”
On Wednesday, Powell refused to be drawn on this specifically, saying “there’s great uncertainty” around the question of AI’s impact on the labor market. “I think, my view, which is also a bit of a guess, but widely shared, I think, is that you are seeing some effects, but it’s not the main, not the main thing driving it.” Still, regarding young people coming out of college, he said “there 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.”
Powell sought to focus reporters’ minds, saying that the economy has simply slowed down and job creation has broadly slowed down with it. AI is “probably a factor,” he added. “Hard to say how big it is.”
The plight of Gen Z and minority jobseekers could reverberate well into the future, with ramifications not just for individual households but for the broader U.S. economy. Research shows that entering the job market during an economic slump can lower lifetime earnings, delay homeownership, and hamper wealth building, particularly for those already facing systemic barriers.
