Job postings requiring a university degree fell by about 8% in the United States during the first quarter of 2025 as rapid adoption of artificial intelligence hit office workers rather than manual labourers, according to a report by Federal Reserve Bank of Dallas researchers Samuel Dodini and Tucker Smith.
The study found that recent university graduates have suffered unusually high unemployment rates during this period of technological transition, making degree holders the first group to feel the impact of generative artificial intelligence on employment and earnings.
Dodini and Smith noted that occupations with the highest exposure to artificial intelligence include software development, web design, and roles that rely heavily on computer usage. Managers, office clerks, writers, and other white-collar desk workers also face high levels of exposure to automation.
The Federal Reserve Bank of Dallas is one of 12 regional reserve banks in the United States Federal Reserve System, tasked with analyzing economic activity and labor market conditions. Generative artificial intelligence systems can analyze data, write software code, and produce text, directly overlapping with entry-level white-collar tasks.
Data center hub sees highest impact
Texas has recorded the highest number of unemployed graduates unable to secure work because of artificial intelligence, according to a report by the Financial Times. The concentration of graduate unemployment in Texas comes despite the state attracting the largest investments in artificial intelligence data centers across the United States.
Texas has expanded its technology sector rapidly in recent years, attracting corporate headquarters and billions of dollars in infrastructure spending to host servers that process complex algorithms. However, the study indicates that capital investment in computing facilities has not protected local university graduates from hiring slowdowns.
Global youth unemployment rises
The findings arrive as global concerns grow over technology replacing human workers. In August, the International Labour Organization reported that youth unemployment was rising worldwide, with the sharpest increases occurring in higher-income economies.
Data from the International Labour Organization showed that youth unemployment in North America climbed from 8.3% in 2023 to 9.8% in 2025. Across Northern, Southern, and Western Europe, youth unemployment remained elevated at 15% in 2025.
The international organization found that positions which traditionally served as entry-level opportunities for young adults entering the workforce were decreasing. Sukti Dasgupta, director of the employment, skills, and sustainable enterprises department at the International Labour Organization, said that while the direct impact of artificial intelligence on jobs remains unclear, policymakers must not become complacent or underestimate the risks.
Dasgupta added that technological progress, including artificial intelligence, must be managed to work for young people rather than against them. The International Labour Organization is a United Nations agency based in Geneva that monitors global labor trends and sets international workplace standards.
