Powell on the gen z hiring a nightmare: “Children leaving the university … have trouble having trouble”
The president of the federal reserve, Jerome Powell, has struck the alarm on what many recent graduates already know – obtaining a job from the start is really difficult at the moment. Speaking during his regular press conference after the meeting of the Federal Open Market Committee, Powell called him “interesting labor market”. He said that people “children who come out of university and young people, minorities, find it difficult to find a job.” Overall, the “job search rate” is very low, said Powell, but again, the layoff rate too. “So you have a low shot shooting environment and low hits.”
Recent work reports indicate that, indeed, it is difficult there. The black unemployment rate increased above 7% in August, while the rate of recent graduates exceeded the overall rate for the first time in recent history. The chief economist of the world management of Apollo, Torsten Slok, famous for Wall Street for having been for the first time to notice a wrinkle in data, noted that it was in fact falling for recent graduates who are women and who are launching for recent graduates who are men. More generally, Slok also noted shortly before the FOMC meeting that America has more unemployed than job offers: 7.4 to 7.2 million.
The last months of 2025, called “the summer AI, which has become ugly” by Deutsche Bank, was full of anecdotal evidence that the adoption of AI does not go well at the level of the company, on the one hand, and that it destroys the entry -level hiring, on the other.
Powell himself previously weighed on the debate on AI jobs, which has experienced predictions of an erasure of 50% of white collar jobs and a fourth industrial revolution creating a premium of new posts, stimulating an intermediate position. “There is certainly a possibility that, at least at the beginning, the AI will replace a lot of jobs, rather than simply increasing the work of people,” Powell told senatorial banking committee at the end of June. “In the long term, AI can increase productivity and lead to greater employment. But it is a processing technology, with unknown effects. ”
On Wednesday, Powell refused to rely on this specifically, saying “there is a great uncertainty” around the question of the impact of AI on the labor market. “I think that my point of view, which is also a little assumption, but widely shared, I think, is that you see effects, but it is not the main thing, not the main thing that stimulates it.” However, with regard to young people who leave the university, he said: “There can be something there. Businesses or other institutions may have hired young people from the start can use AI which, more than they had done in the past. This can be part of the story. “
Powell sought to concentrate the minds of journalists, saying that the economy has simply slowed down and that job creation has widely slowed down. AI is “probably a factor,” he added. “Difficult to say how tall it is.”
Long -term consequences
The fate of generation Z and minority job seekers could affect well in the future, with ramifications not only for individual households but for the wider American economy. Research shows that entering the labor market during an economic collapse can reduce life income, delay home ownership and wealth building, especially for those who are already confronted with systemic barriers.
The academics have been studying the “scars” or “hysteresis” of the labor market, which have been the result of economic slowdowns for decades. Professor of Harvard, David Ellwood, presented the language of “permanent scars” in 1982, and Olivier Blanchard and Larry Summers advanced research in a revolutionary article in 1986, arguing that unemployment, in particular after a recession, can have a major impact on the career of someone for many years to come. Adam Posen, president of the Peterson Institute for International Economics, told Bloomberg Podcast in August that the economy looked difficult for hysteresis since the 2008 major recession but did not find it.
David Blanchflower of Dartmouth College and Alex Bryson of the University College London have found something curious: wages and unemployment of young people have not suffered spectacular since the 2010s, but they see an undoubtedly increase in “despair” among young workers, extending over the past decade. Blanchflower said Fortune Earlier this month, he thinks it can be summed up in an attitude of “this work is zero”. Now, to this image, you add something unmistakable: unemployment goes in the wrong direction.
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