Washington
CNN
 — 

Cam Tangalakis-Lippert has submitted hundreds of job applications since being laid off from her software engineering gig at Twitch a year ago. The 25-year-old Sacramento resident told CNN she’s a few months away from running out of money.

Tangalakis-Lippert is one of millions of Americans in their 20s who are struggling to find a job these days. In 2024, businesses were unusually slow to hire as workers quit their jobs less frequently — a phenomenon known as “The Great Stay.”

Those conditions are expected to largely remain the same this year, according to economists, keeping young Americans from getting their foot in the door or from getting back on their feet after layoffs. Studies show that early setbacks in a worker’s career can affect their lifetime earnings, mental health and career development.

“It’s been excruciating,” Tangalakis-Lippert said. “I’m no longer focusing all of my energy on trying to get a software engineering job. I’ve applied for a job at Best Buy, at every grocery store.”

“It feels really bad going from making $100,000 a year to probably having to work minimum wage,” she added.

The US job market overall remains on solid footing, with unemployment at a low 4.1% as employers continue to add jobs at a brisk pace.

But it has slowed steadily over the past two years, normalizing from the heydays of 2022 when there were a record 12.2 million openings. As a result, there was unusually slow churn in the job market last year: The rate at which Americans are hired declined to 2013 levels — with white-collar industries and manufacturing pulling back the most — as the quit rate hovered below pre-pandemic levels.

That slower churn has had an outsized impact on younger workers.

Employment of workers aged 25 to 34 saw the second-largest annual decline in December across all age groups, according to Labor Department data released Friday. Employment among those 20-24 was down slightly that month. Meanwhile, for the 35-44 and 45-54 cohorts, employment was up during the same period.

Younger workers in certain industries could be in for an especially hard year.

“In those sitting-down type of jobs, or white-collar jobs, it will continue to be tough for those recent graduates or young unemployed folks,” said Andrew Flowers, an economist at recruitment marketing firm Appcast. Flowers pointed to persistent woes in the tech industry. “We’re already at full employment, and one of the implications of that is that the rate of hiring slows.”

Alexander Bloukos graduated in August with a master’s degree in international political economy from the London School of Economics but hasn’t found a job. He has submitted hundreds of applications over the past few months, yielding only a few dozen interviews, he told CNN.

The 23-year-old, who lives with his parents in Boston, said friends around his age have been dealing with the same challenges.

“I think we’re just getting crowded out by people with more experience,” Bloukos said. “It’s kind of depressing, but you just have to figure out a way to keep moving forward.”

Hiring of younger folks could eventually pick up if the Federal Reserve continues to cut interest rates. The central bank has already rolled out three rate cuts since September.

“Lower borrowing costs are actually translating into improved affordability and more business activity,” said Julia Pollak, chief economist at ZipRecruiter. “The labor market lags those kinds of improvements in economic conditions and business activity, but not by that much. If these improvements are sustained, you’re going to see hiring pick up in the next few months, and that will lead to more job switching.”

The outlook varies by industry. Pollak said hiring in finance may increase this year because of expected deregulation and a more favorable environment for mergers and acquisitions.

However, Wall Street isn’t pricing in additional rate cuts until later in the year, based on inflation’s limited progress in recent months. The economy’s resilience in the face of elevated borrowing costs also suggests that Fed officials don’t need to be in any rush to cut interest rates further.

And even if hiring increases, it could take a while to help young workers.

“Young workers, women, Black workers, they’re often last in and first out, so it does typically take a bit of time before their conditions improve,” Pollak said. “Let’s say openings and net job gains start picking up six months from now. It will take another three to six months after that before marginal groups start to see any meaningful gains.”