By Ian O’Rourke
Why do kids love college so much more than high school? Is it the partying or the 10am classes? The freedom of not being bossed around by parents? That’s all well and good, but here is something all college students hate: searching for jobs. Whether it’s cold emailing company executives while taking difficult classes or browsing through LinkedIn reaching out to fellow alumnus after graduation, searching for jobs can be incredibly stressful. And according to the recent outlook on the economy, the stress is on.
Why is the stress on, you may ask? Well… the U.S. annual inflation rate from this past October was a striking 7.7%, which has been fought tooth and nail with the Fed’s rising interest rates. However, inflation has not yet slowed down, and rising prices, along with rising interest rates, are starting to hurt companies. For example, Disney has lost $1.47 billion in net streaming profits this past quarter (that includes Disney+, Hulu, and ESPN+), leading them to announce a hiring freeze and job cuts. Additionally, Snap, the parent company of Snapchat, decided to cut 20% of its employees in late August. The tech sector at large is beginning to see hiring freezes and layoffs because of the rough state of the economy. This is indeed troublesome for people looking for tech jobs, such as college students. But how hard will finance jobs be hit?
First, let’s take a look at banking. According to Business Insider, “M&A volumes are down 21% year-over-year, and fees from equity capital markets are down 72%”. It turns out that high inflation has been a punch in the gut to investment banking divisions at every bank, meaning that hiring slowdowns for college graduates would certainly not be surprising. Goldman Sachs has already stated that they will slow hiring and will plan on not replacing some positions left open by employees jumping ship. College grads looking to work at Goldman Sachs are also worried about losing their full-time offers (Weinmann). Other banks could easily follow suit, as JP Morgan, a major bulge bracket bank, saw revenue decline by 55% from last year. We cannot extrapolate this trend to every single bank, but given the volatility of the market, combined with rising inflation and low interest rates, it seems like there could at least be a large-scale hiring slowdown, especially for recruitment.