Job market for college grads may be slowing, but these industries are still strong options

Lucas Voron had visions of the nation’s glittering tech giants – Apple, Google, Amazon and Facebook owner Meta – locked in a bidding war for his talents when he graduates from Santa Clara University next month.

“That is the dream scenario,” says Voron, a computer science and engineering major who wants to be a software developer.

But the big four, among other tech companies, have laid off more than 350,000 workers since early last year and none responded favorably to his job application.

Not a problem. Voron is perfectly content with the six-figure software development job he’s lined up at Hewlett Packard Enterprise, where he interned last summer. The position, he notes, involves website development for businesses and is more stable than any job he might have landed at the industry’s household names.

Since he would have been among the last hired at the tech titans, he says he likely would be among the first swept into any future round of layoffs. Amazon reportedly has delayed the start date for the recent grads it has hired from May until the end of the year.

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How is the job market for recent college graduates?

Voron’s experience underscores how dramatically the labor market for college grads has shifted since May 2022, with hiring overall cooling significantly. There are still plenty of available jobs for the Class of 2023, economists and university officials say. Hiring, though, has partly shifted from fields that dominated campus recruitment in recent years, such as tech, finance and logistics, to health care, education, retail and construction, say economists and university officials.

“The growth of the labor market is still strong but it’s slowing down,” says Luke Pardue, an economist at Gusto, a payroll processor for small and midsize businesses. “The opportunities have shifted to other industries.”

A year ago, U.S. employers posted 11.4 million openings, a near-record high, and college grads benefitted from a feeding frenzy by employers desperate to find workers amid severe pandemic-related labor shortages.

That crunch has eased as many Americans sidelined by the pandemic have streamed back into the labor market. In March, there were 9.6 million job openings, or 1.6 for each unemployed American, down from a record two vacancies per jobless person last year.

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Industries such as technology and finance have seen job growth slow because of excessive hiring during the health crisis or the Federal Reserve’s aggressive interest rate hikes to fight inflation. While growth in the job market remains solid overall, many economists expect the Fed hikes and the crisis ensnaring regional banks to tip the economy into a recession later this year, sparking hundreds of thousands of job losses.

College graduates are still landing positions.

Based on its payroll data, Gusto predicts employment of 20- to 24-year-olds, including college grads, will increase 5.4% this month from April, down from a 7.2% rise a year ago. Pardu says the forecast reflects a sturdy but less robust job market for the Class of 2023.

Last month, the National Association of Colleges and Employers said employers are planning to hire 3.9% more freshly-minted graduates than last year, according to its survey of 216 employers earlier this year. That’s well below its fall estimate of a 14.7% increase and its forecast last year of a 31.6% rise in hiring for 2022 graduates.

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Some of this year’s grads are at a disadvantage because they couldn’t participate in internships or extracurricular activities during the COVID-19 pandemic, leaving them without the experience employers are seeking, says Jeff Beavers, executive director of the Career Services Network at Michigan State University. By contrast, 2022 grads generally got that experience before the pandemic.

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Some industries will likely bring on more grads than in the past, Gusto says.

In March, the hiring of workers in their early 20s increased:

• In food and beverage by 9.6% annually, up from a 5.3% bump a year earlier.

• Retail, 7.7%, up from 5.2%.

• Education, 7.2%, up from 6.1%.

• Health care and social assistance, 5.9%, up from 5.8%

• Accounting, 2.4%, up from, 1.9%.

At Michigan State University, some employers in the tech and supply chain and logistics industries reduced or canceled internships, Beavers says.

Meanwhile, he says, construction, health care, education and the packaging industry all have accelerated recruitment.

Retail has bounced back to its pre-pandemic hiring level for corporate positions.

In San Jose, California, the nation’s leading tech hotbed, technology companies have been cutting employees but the accounting firms that serve them and other businesses are chugging along.

At its San Jose offices, Frank, Rimerman & Co. is looking to hire 60 to 100 college grads this year but is struggling to meet that quota,

“Fewer students are going into the accounting profession,” says Patti Gower, the company’s director of recruitment. “That’s what’s causing trouble for us.”

At the same time, she says, the company must compete for new grads with the big four accounting firms.

“There are so many employer choices they can make,” Gower says.

This article originally appeared on USA TODAY: Is job market cooling for college grads? Not in these industries.