Educated but unemployed, a rising reality for US college grads
Structural shifts in tech hiring and the growing impact of AI are driving higher unemployment among recent college graduates.
Higher recent college graduate unemployment will add to the Federal Reserve’s concerns of a slowing economy, weakening labor market, and accelerating inflation.
Higher unemployment among recent college graduates is primarily a function of a structural shift in hiring in the tech sector amid strong labor supply growth. While some of it is related to a normalization after the post-pandemic surge, there are signs that entry-level positions are being displaced by artificial intelligence at higher rates.
Despite uncertain employment prospects, recent college graduates remain undeterred, as labor force participation rates haven’t noticeably declined.
Underemployment rates for college graduates and employment in positions that don’t require a college degree remain steady, signaling that graduates aren’t shifting their job searches.
