The hot labor market has melted away. Just ask new college grads.

For much of the past three years, employers were fighting one another for workers. Now the tables have turned a bit. Few employers are firing. Layoff rates remain near record lows. But fewer employers are hiring.

That has left job seekers, employed or unemployed, competing for limited openings. And younger, less experienced applicants — even those with freshly obtained college degrees — have been feeling left out.

A spring survey of employers by the National Association of Colleges and Employers found that hiring projections for this year’s college graduating class were below last year’s. And it showed that finance, insurance and real estate organizations were planning a 14.5% decrease in hiring this year, a sharp U-turn from its 16.7% increase last year.

Separately, the latest report from the Bureau of Labor Statistics shows the overall pace of hiring in professional and business services — a go-to for many young graduates — is down to levels not seen since 2009.

For recent graduates, ages 22-27, rates of unemployment and underemployment (defined as the share of graduates working in jobs that typically do not require a college degree) have risen slightly since 2023, according to government data.

At 4.3%, the unemployment rate is still low. But a key measure of labor market momentum known as the hires rate, which tracks a month’s hires as a share of overall employment, has notably fallen back to the sluggish pace of 2014.

“That is historically consistent with an unemployment rate of 6.5%,” said Guy Berger, director of economic research at the Burning Glass Institute, which studies the labor market. “It’s a tough time to find a job.”

The LinkedIn Careers Index, a survey of LinkedIn members meant to track how they are feeling about their ability to get a job and a raise, and progress in their careers, was rising until January 2023. But the compilers of the index found last month that “workers are less confident in their career progress” than in July 2020, just after the brief but brutal pandemic recession.

Altogether, the data depict a moment that is far from dire for most recent graduates, but still discouraging for those who have spent the past year hunting for opportunities, especially work that feels like the right fit for their education and skills.

Baily Hays, a 2023 graduate of Pepperdine University in Malibu, California, is among them. An international relations major who lives in Seattle, she found an unpaid internship at a global nonprofit, International Justice Mission, shortly after finishing school so she could build more experience while looking for paid work.

But even after it ended, Hays spent four months of this year unemployed, in what she called a “grueling process.” And she wasn’t alone, she said: Other new graduates she knew spent “six to nine months” searching for a job, or are still looking. “I could say for probably almost 100% of my friends, it was pretty horrible,” she said.

She felt that she and many of her young peers were falling victim to “ghost listings” — job listings left up by employers that are not actively being filled. According to a wide range of labor market analysts, that ghosting has not just been in their heads.

Lisa K. Simon and Stephanie Hao, economists at Revelio Labs, a company that tracks employment data, found that the ratio of completed hires to job postings had plunged recently. In 2021, there were roughly eight hires for every 10 job postings. By early this year, there were only four hires per 10 postings. (Some of this could be explained by economic uncertainty among employers, not changes in their norms, but Revelio Labs also reported a 160% increase since 2018 in the share of interviewees who mention receiving no reply from recruiters.)

While searching for full-time work, Hays picked up dog-sitting gigs and, recently married, was able to save by moving in with her in-laws.

When a job opportunity in human resources came her way through a mentor’s reference, she jumped at it. Though it was not necessarily her first pick coming out of school, she said, she has “totally adapted, and it’s been good.”

Still, there were times she wondered about going to graduate school — “so I could skip the years of a bad job market,” she said.

After inflation soared in late 2021, the Fed responded by rapidly raising interest rates in 2022 and 2023. A large part of the Fed’s stated aim was to slow down the labor market by making the cost of expanding a business less attractive. The economy has avoided an outright contraction in commercial activity, or a burst of bankruptcies. But Fed officials have largely achieved their implicit goal: suppressing the ability of many workers to obtain big raises or higher-paying jobs of their choice, which, in the view of policymakers, helps suppress inflation.

Inflation has decelerated sharply over the past year. And that has led Fed officials to signal they will soon ease up on the tight financial screws their rate policies put on many businesses. That is great news for recent graduates, and those of the near future, according to Karin Kimbrough, the chief economist for LinkedIn.

“I talk to a lot of C-suite professionals,” Kimbrough said. And based on those conversations she believes that businesses have a pent-up willingness to hire, but have been in limbo, anxiously waiting for the Fed to actually lower rates.

“Companies that are waiting very much for rate cuts to materialize are also quite cautious about the economic outlook,” she said in an interview late last month. “In that liminal state between whether we have actually escaped a recession — which it appears so far we have — I just think companies have been very cautious about hiring new entrants to the job market. I don’t think that’s a permanent state — I think that it’ll look different next year.”

This article originally appeared in The New York Times.

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