GenzeeIt's Not Just AI: Fed Study Points to a Bigger Reason Gen Z Can't Find Work
AI gets a lot of the blame for Gen Z's rough job market, but a Federal Reserve study suggests the bigger culprit is simpler: there just aren't enough jobs. According to Fortune's coverage published 25 June 2026, a Federal Reserve Bank of St. Louis analysis found that the unemployment rate among 18-to-24-year-olds rose 2.9 percentage points between April 2023 and late 2025 — and a shortage of job openings accounted for more than double the increase attributed to employers shifting toward AI-related skills and roles.
Two forces, tangled together
The St. Louis Fed's breakdown attributed only about 1.1 percentage points of the rise to AI-driven changes in hiring, with the remainder tied to a broader slowdown in overall job creation, per Fortune. That doesn't mean AI isn't a factor — leading tech executives have said they expect its effect on junior hiring to keep growing — but it suggests the job market itself, not automation alone, is the dominant force behind Gen Z's struggles.
What this means for job seekers
A tighter overall market means longer searches and more competition regardless of AI exposure. While you search, it's worth building a financial cushion — our Savings Goal Calculator can help you set a realistic emergency fund target for an uncertain job market.
Note: This is a plain-language summary, not financial advice. Markets, rates and rules can change quickly; do your own research or speak to a licensed adviser before acting. See our editorial policy for how we source and date figures.