On paper, the job market looks pretty darn good.
The 4.3% unemployment rate is below both the 10-year average of 4.6% and the 50-year average of 6.1%. For the second month in a row, the official government tally of jobs added blew past economists’ expectations. And the most recent Job Openings and Labor Turnover Survey showed hiring surged in March.
So why are so many people struggling to get hired lately?
Many of the challenges job seekers face today stem from a yearslong decline in job openings, which has intensified competition for available roles. In response, more people pursued advanced degrees hoping to gain an edge in the market, but for many, that hasn’t materialized. At the same time, major workforce cuts in sectors like the federal government have added even more candidates to an already crowded field.
“When we look at that payroll number … that is just not reflecting what most people’s experience in the labor market today is,” said Kory Kantenga, head of economics at LinkedIn, referring to the April jobs report, which indicated employers added 115,000 new jobs that month.
Here’s what’s going on.
In April, half of the new jobs created came from healthcare, while the other half came from retail, and transportation and warehousing.
However, “most people are not looking for jobs as couriers and messengers,” Kantenga told CNN. And even if that were the case, he said it’s unreasonable to expect the pace of job creation on the retail and transportation and warehousing side to be long-lasting, since many roles in those fields are more vulnerable to automation.
The healthcare sector has remained robust since demand for workers keeps rising as the population ages — and also because many services can’t easily be automated.
In other sectors, however, competition has widened while the pool of new postings has not.
Sophie Duryee, a political economy major who graduated from UC Berkeley last year, dreamed of working in the public sector, ideally in a regulatory compliance role.
But that’s been an uphill battle. Since reaching peak levels in 2024, federal employment is down by nearly 350,000 as of April, according to Bureau of Labor Statistics data. The decline stems from Department of Government Efficiency cuts, and it’s made state and local government jobs harder to land because of increased competition from laid-off federal workers.
“Rather than relying on government spending to pad employment data as Joe Biden had done, the Administration is delivering with a proven economic agenda to boost private-sector job growth,” White House spokesperson Kush Desai said in a statement to CNN.
Duryee also had little success applying for private-sector roles last year, as laid-off federal workers were likely flooding the same job pool.
“Within the span of a year, essentially something that I had been working my entire life around was kind of like pulled out from under me,” she told CNN.
AI is reshaping the job market, from reducing the number of open roles in some industries to changing how candidates search and apply for positions.
AI can now enable job seekers to quickly fire off potentially hundreds of tailored job applications. Some AI tools can even handle the application process from start to finish — and potentially overwhelm hiring systems.
Saul Chavez, who is in his mid-40s, was laid off from a role as a project manager at a media company in September and has had only a handful of interviews at media companies since then. In the meantime, he has been working two simultaneous part-time jobs in public education programs.
Job hunting can be harder for those who are mid-career or older, since “they may be more out of practice as they’re generally settled into their career for longer,” Lauren Thomas, an economist at payroll and HR company Deel, told CNN.
That’s backed up by the data: Four years ago, laid-off workers 45 to 54 years old were unemployed for an average of 27.1 weeks, compared to the current average of 30.7 weeks, according to the BLS. Those rates have also climbed for people 55+.
Meanwhile, people ages 35 to 44 are unemployed for an average of 24.6 weeks.
“I just don’t feel like it should be that hard or have all these hurdles,” Chavez said. “I still have to keep jumping through all these hoops, which at this point in my life I didn’t think I’d need to.”
Graduate degrees, long thought of as a career advancement tool, may be inadvertently working against some people.
“Our data shows that the segment that has really slowed down and having a really challenging time getting hired is those advanced degree holders,” said Kantenga of LinkedIn.
Part of the problem is that more people pursued advanced degrees when the job market began to weaken in 2023, so these applicants now don’t stand out as much, he said. On top of that, hiring demand has slowed in professions that typically attract advanced-degree holders, such as tech and finance.
Several large employers in those sectors, including Amazon and Block, have cited increased productivity stemming from AI as reasons for recent cuts. And there could be more to come.
But down the road AI could even lead to more hiring.
“Often increased productivity and efficiency actually mean people want a lot more of something,” said Thomas, “so they hire more people to make up for it.”