The U.S. economy is booming, with unemployment rates recently dropping to their lowest levels in half a century. Unfortunately, the latest data from the New York Fed suggests recent college graduates aren’t necessarily benefiting.
The unemployment rate among recent college graduates aged 22 to 27 is now 4%, higher than the national average unemployment rate of 3.5%. The more troubling trend is that unemployment among these new grads is actually up from 3.6% a year ago and lows of 2.5% in February 1998 and 3.3% in May 2007.
In other words, despite the economic boom for most workers, recent college grads are actually having a more difficult time finding employment.
In April, the unemployment rate among recent college graduates came in above the unemployment rate for the economy as a whole for six consecutive months. That marked the first six-month stretch where recent grads were less employed than the average worker in nearly 30 years.
Underemployment among college grads also remains higher than during previous economic peaks. Roughly 34% of college grads aged 22 to 65 are currently underemployed, a higher rate than the previous troughs of 31.6% in January 2001 and 33.7% in May 2009. About 41% of recent college grads are currently underemployed.
See Also: 10 Worst College Majors For Making Money
Wage Trends Not Helping
At the same time, wage growth is also trending in the wrong direction. In 1990, the median wage for Americans aged 22 to 27 that have a bachelor’s degree was $45,000. As of 2018, that median wage is now $44,000.
For Americans aged 22 to 27 with only a high school diploma, median wages have fallen from $33,000 in 1990 to just $28,000 in 2018.
DataTrek Research co-founder Jessica Rabe said this week rising unemployment among recent college grads is worrisome.
“At least the underemployment rate for recent college grads is relatively flat, but unemployment is increasing amid stagnant wages and record levels of student debt,” Rabe said.
“That is not a winning recipe for the next recession, and highlights a weakening area in the US labor force that bears watching.”
One way current and future college students can avoid employment problems following graduation is to avoid majoring in subjects that have poor employment prospects. Focusing on high-growth, high-demand majors in technology is a good way to improve your employment outlook upon graduation.
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