The U.S. job market isn’t looking too hot for recent college graduates and other job seekers, according to economists and labor experts.

“The job market is kind of trash right now,” said Mandi Woodruff-Santos, a career coach and personal finance expert.

“I mean, it’s really difficult,” she added. “It’s really difficult for people who have many years of experience, so it’s going to be difficult for college kids.”

The national unemployment rate in May was relatively low, at 4.2%. The layoff rate has also been historically low, suggesting employers are holding on to their workers.

Yet, hiring has been anemic. The pace of employer hiring in April was the lowest in more than 10 years, since August 2014, excluding the early months of the Covid pandemic.

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The rate at which workers are quitting — a barometer of worker confidence about their job prospects — has also plummeted to below pre-pandemic levels, a stark reversal from the “great resignation” in 2021 and 2022.

“It will be a tough summer for anyone looking for full-time work,” Heather Long, chief economist at Navy Federal Credit Union, wrote in an e-mail Friday.

“This is an ‘abundance of caution economy’ where businesses are only filling critical positions and job seekers, especially recent graduates, are struggling to find employment,” she said.

Businesses added more jobs than expected in May, for example. But those gains have slowed significantly — a worrisome sign, economists said.

Employers appear reluctant to hire in an uncertain economy.

CEO confidence plummeted in the second quarter of 2025, seeing its largest quarterly decline on record dating to 1976, according to a survey by The Conference Board. Uncertainty around geopolitical instability, trade and tariff policy were the largest business risks, according to Roger Ferguson Jr., the group’s chair emeritus.

The share of CEOs expecting to expand their workforce fell slightly, to 28% in Q2 from 32% in Q1, and the share planning to cut their workforce rose 1 point, to 28%. 

“The steady erosion in the US job market cannot continue forever — at some point, there will just not be much left to give,” Cory Stahle, an economist at the Indeed Hiring Lab, wrote in an analysis Friday.

“In a low-hiring, slow-growth environment, employers can only hold onto their existing employees for so long before they too will have to be let go — increasing unemployment even as job opportunities continue to shrink,” Stahle wrote.

For many students and their families, federal student aid is key for college access.

And yet, the Trump administration’s budget proposal for fiscal year 2026 calls for significant cuts to higher education funding, including reducing the maximum federal Pell Grant award to $5,710 a year from $7,395, as well as scaling back the federal work-study program. The proposed cuts would help pay for the landmark tax and spending bill Republicans in the U.S. Congress hope to enact.

Roughly 40% of undergraduate students rely on Pell Grants, a type of federal aid available to low-income families who demonstrate financial need on the Free Application for Federal Student Aid. Work study funds, which are earned through part-time jobs, often help cover additional education expenses. 

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President Donald Trump‘s “skinny” budget request said changes to the Pell Grant program were necessary due to a looming shortfall, but top-ranking Democrats and college advocates say cuts could have been made elsewhere and students will pay the price.

“The money we invest in post-high school education isn’t charity — it helps Americans get good jobs, start businesses, and contribute to our economy,” Sen. Elizabeth Warren, D-Mass., told CNBC. “No kid’s education should be defunded to pay for giant tax giveaways for billionaires.”

Nearly 75% of all undergraduates receive some type of financial aid, according to the National Center for Education Statistics.

“Historically the Pell Grant was viewed as the foundation for financial support for low-income students,” said Lesley Turner, an associate professor at the University of Chicago Harris School of Public Policy and a research fellow of the National Bureau of Economic Research. “It’s the first dollar, regardless of other types of aid you have access to.”

Under Trump’s proposal, the maximum Pell Grant for the 2026-2027 academic year would be at its lowest level in more than a decade.

“The Pell reduction would impact the lowest-income families,” said Betsy Mayotte, president of The Institute of Student Loan Advisors, a nonprofit.

More than 92% of Pell Grant recipients in 2019-2020 came from families with household incomes below $60,000, according to higher education expert Mark Kantrowitz.

The Congressional Budget Office projected a shortfall this year in part because more students now qualify for a Pell Grant due to changes to the financial aid application, and, as a result, more students are enrolling in college.

As the Senate weighs President Donald Trump‘s multi-trillion-dollar spending package, a lesser-known provision tucked into the House-approved bill has pushback from Wall Street.

The House measure, known as Section 899, would allow the U.S. to add a new tax of up to 20% on foreigners with U.S. investments, including multinational companies operating in the U.S.

Some analysts call the provision a “revenge tax” due to its wording. It would apply to foreign entities if their home country imposes “unfair foreign taxes” against U.S. companies, according to the bill.

“Wall Street investors are shocked by [Section] 899 and apparently did not see it coming,” James Lucier, Capital Alpha Partners managing director, wrote in a June 5 analysis.

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If enacted as written, the provision could have “significant implications for the asset management industry,” including cross-border income earned by hedge funds, private equity funds and other entities, Ernst & Young wrote on June 2.

Passive investment income could be subject to a higher U.S. withholding tax, as high as 50% in some cases, the company noted. Some analysts worry that could impact future investment.

The Investment Company Institute, which represents the asset management industry serving individual investors, warned in a May 30 statement that the provision is “written in a manner that could limit foreign investment to the U.S.”

But with details pending as the Senate assesses the bill, many experts are still weighing the potential impact — including who could be affected.

Here’s what investors need to know about Section 899.

Several kinds of tax fall under “unfair foreign taxes,” according to the provision. Those include the undertaxed profits rule, which is associated with part of the global minimum tax negotiated by the Biden administration. The term would also apply to digital services taxes and diverted profits taxes, along with new levies that could arise, according to the bill.

The second part of the measure would expand the so-called base erosion and anti-abuse tax, or BEAT, which aims to prevent corporations from shifting profits abroad to avoid taxes.

“Basically, all businesses that are operating in the U.S. from a foreign headquarters will face that,” said Daniel Bunn, president and CEO of the Tax Foundation. “It’s pretty expansive.”

The retaliatory measures would apply to most wealthy countries from which the U.S. receives direct foreign investment, which could threaten or harm the U.S. economy, according to Bunn’s analysis.

Notably, the proposed taxes don’t apply to U.S. Treasuries or portfolio interest, according to the bill.

House Ways and Means Committee Chairman Jason Smith, R-Mo., first floated the idea in a May 2023 bill, and has been outspoken, along with other Republicans, against the global minimum tax.

If enacted as drafted, Section 899 could raise an estimated $116 billion over 10 years, according to the Joint Committee on Taxation.

That could help fund other priorities in Trump’s mega-bill, and if removed, lawmakers may need to find the revenue elsewhere, Bunn said.

However, House Ways and Means Republicans may ultimately want foreign countries to adjust their tax policies before the new tax is imposed.

“If these countries withdraw these taxes and decide to behave, we will have achieved our goal,” Smith said in a June 4 statement.