It’s a tough time to be starting a career and this year has been extremely rough: a new report shows that new college graduates had 40% fewer job prospects. And the outlook for 2010, while better, is still not very promising.  Jobs for graduates with bachelor’s degrees, which account for most new graduate hires, will drop nearly 1% next year, according to Michigan State University’s survey on recruiting trends.

Overall, hiring of grads with any degree will decline by 2% compared to 2009. ”Things fell apart really fast last year, but it looks like the job market for graduates has hit a bottom,” said Phil Gardner, director of MSU’s Collegiate Employment Research Institute, which conducts the annual survey.

Hiring of master’s degree graduates will plummet by 11% based on a weaker labor market for accounting students, the study said. But, jobs for Ph.D.s will spike by 20% and those for MBA graduates will rise 11%. A good sign for MBA students.

Large companies, those with more than 4,000 employees, plan to decrease hiring of all graduates by 3%, and medium-sized companies, those with between 500 and 4,000 employees, expect to lower hiring by 11%. Smaller companies, however, may provide a bright spot in the job market for new graduates.

Employers with fewer than 500 staff members said they expect hiring at their companies to jump by 15%. These companies will hire 11 new graduates on average in 2010, and 8 of them will be at the bachelor’s level.