As young Canadians finish school and look to start their careers, they’re being confronted with a harsh reality: This is the worst job market for graduates in decades.

In the first quarter of 2025, the average unemployment rate for recent grads – those under 25 who’ve completed university or other postsecondary education and aren’t currently enrolled in school – was 11.2 per cent, according to an analysis of Statistics Canada data from Brendon Bernard, senior economist at job-search site Indeed Canada. For this group, that’s the highest jobless rate to start the year in at least two decades, excluding the pandemic.

“Youth have borne the brunt of Canada’s weaker labour market in recent years,” Mr. Bernard said via e-mail. “This is partly because their job prospects are generally more sensitive to ups and downs in employer demand, but also magnified recently, as population growth among 15-to-24-year-olds has soared.”

The Canadian labour market has weakened over the past three years, coinciding with the Bank of Canada’s interest-rate hikes to quell inflation, which have weighed on economic growth and hiring activity.

With rates on the decline, the job market was primed for a rebound. But the U.S.-driven trade war has dimmed the outlook, forcing many companies to scale back their hiring and investment plans.

For young job seekers, the timing of the trade war – layered on top of an already-challenging labour market – is brutal.

“This rapid deterioration is concerning, both for how the initial time just out of school is a high-stakes period for people’s careers, and the fact that the uncertain economic outlook could further hit conditions as new cohorts of grads join the labour market,” Mr. Bernard said.

Decoder is a weekly feature that unpacks an important economic chart.