Rising number of college grads are unemployed, new research shows

Recent college graduates are facing a challenging job market, despite their higher education degrees that are typically seen as an advantage. A recent report from Oxford Economics reveals that unemployed recent college grads make up 12% of the 85% rise in the national unemployment rate since mid-2023, even though they only represent 5% of the total labor force. Additionally, the unemployment rate for recent college graduates aged 22 to 27 is nearing 6%, surpassing the national average of 4.2%.

Matthew Martin, a senior U.S. economist at Oxford Economics, highlighted the concerning trend, noting that individuals with bachelor’s degrees or higher are experiencing higher unemployment rates compared to previous years. This shift is unexpected as higher educational attainment typically leads to better job prospects.

The report attributes the rise in unemployment among recent college graduates to a mismatch between the oversupply of graduates in certain fields and the declining demand for these skills in the job market. Specifically, the tech industry, which has seen a surge in college graduates with degrees in computer science, is experiencing challenges due to automation and advancements in artificial intelligence.

While the tech sector initially hired aggressively post-pandemic, there has been a slowdown in hiring, impacting recent graduates seeking employment in this industry. The report suggests that the mismatch between business demand and labor supply is most pronounced in the technology sector, where AI is increasingly replacing lower-level computer science roles.

Economic uncertainty, exacerbated by changing tariff policies, has also contributed to businesses delaying hiring and investment decisions. This uncertainty could further hinder job prospects for recent college graduates in the near future, according to Martin.

Furthermore, underemployment is a growing concern for college-educated workers who are unable to secure jobs in their desired field. This can lead to long-term career challenges, as underemployed workers often remain in these roles for extended periods.

In conclusion, recent college graduates are facing unique challenges in the current job market, particularly in industries like tech where automation is reshaping job roles. Economic uncertainty and underemployment are further complicating the job search for these individuals. To improve prospects for recent graduates, increased hiring in key sectors and a reduction in economic uncertainty are crucial.