I remember friends coming back to the university job fair telling me how bad it was out there. With 1-2 years experience they came back to our engineering job fair looking for internships and entry-level positions. Those without prospects just rode it out in graduate school. If you weren't in a position to repay student loans it was better to load up more debt and delay it a few years.

I was c/o 2003. There was a lot of slack in the entry-level pipeline as companies were recovering but didn't need to seek new graduates because there was a 3 year backlog.