The hot U.S. job market is tougher than it seems for one slice of the labor force.
Newly minted college graduates are seeing higher unemployment rates than the general population for the first time in a generation.
The unemployment rate for those aged 22 to 27 with a recently acquired bachelor’s degree or more was 4% in September — about 0.4 percentage points higher than workers across all age groups, according to the New York Federal Reserve.
The milestone may reflect a sign of broad job market strength, not weakness, said Steve Bronars, an economist with Edgeworth Economics. Eager new graduates are still enjoying one of the best labor markets in years.
“It takes time for people just out of school to find a job, and recent graduates change jobs more frequently,” Bronars said. With the overall U.S. unemployment rate at a 50-year low “these new graduates are being compared to a workforce that is highly utilized.”
Finding fresh employment out of college is often harder than changing jobs for existing workers, he said. New graduates typically take more time making contacts in their industry and nailing down interviews, for example.
Still the jobless rate for recent college grads remains significantly below the 6.5% rate for young workers without a bachelor’s degree, according to the Fed data.
An area of concern is the poor prospects for graduates who find themselves underemployed. More than four in 10 recent graduates are working in jobs that typically don’t require a college degree, according to the New York Fed. Roughly one in eight is working in a field that tends to pay around $25,000 or less per year.
The top three fastest-growing occupations over the next decade paid about a median wage of $26,530 last year, according to data from the U.S. Bureau of Labor Statistics.
Jobs for personal care aides and home health aides are expected to grow by almost 1.2 million by 2028 but they only pay about $24,000 a year. Cooking jobs are expected to increase by almost 300,000 positions. The role pays a relatively low salary of about $26,500.