U.S. college students and recent graduates are grappling with a double burden of wider AI adoption and a frozen youth job market. As companies rapidly adopt AI for application reviews and pre-interview screening, job seekers are also being asked to make AI proficiency a new source of competitiveness.

On Aug. 25, CNBC reported that a LinkedIn survey found 66 percent of hiring managers plan to increase the use of AI for pre-interview screening this year. Some 81 percent of job seekers also said they have already used AI in the job search process or plan to do so. Automation is spreading quickly on both the application and selection sides.

The hiring environment is also challenging. The New York Federal Reserve said the unemployment rate for recent college graduates aged 22 to 27 was about 5.6 percent in the second quarter this year, while the underemployment rate for those working in jobs that do not require a bachelor’s degree reached 42 percent. Still, it is hard to say AI has directly eliminated entry-level jobs. The New York Fed said overall hiring has slowed, but evidence remains limited that demand for workers has fallen more sharply only in occupations with high AI exposure.

Companies, meanwhile, are raising their demands for AI capabilities. The National Association of Colleges and Employers said 16.5 percent of entry-level job postings this spring specified AI skills, and 28 percent of companies expected new hires to be able to use AI in their work. But about one-third of students set to graduate rated AI skills as having little importance to their future careers, and more than half were not separately building related capabilities.

Students are also responding. Handshake said the share of 2026 graduates who mention AI capabilities on their resumes was twice as high as for 2022 graduates, and 74 percent of those mentions were tied to projects and practical experience rather than classes. In the AI era job race, experience applying AI to real work, rather than simple tool use, is emerging as a new differentiator.