Recent college graduates are facing an uphill battle in the job market this summer as the unemployment rate for graduates has surpassed that of the general workforce. This dissipating employment viability for recent college graduates has been illustrated by the Federal Reserve Bank of New York. After stably recovering from the initial impact of the pandemic, the unemployment rate for fresh graduates started to diverge upwardly since the summer of 2022.
The situation is feared to exacerbate as the job market shows signs of slackening and employers exhibit diminishing tendency to hire fresh graduates. As noted by Nick Bunker, the Economic Research Director for North America at Indeed's Hiring Lab, young professionals who lack substantive experience bear the brunt whenever recruitment rates decline. This causes fresh graduates to experience exceptionally challenging predicaments when job opportunities start to dwindle.
Despite a general slowdown, the employment market remains robust compared to historical trends. Job vacancies remained almost static in May with a minor predicted drop in June. Although vacancies remain above pre-pandemic counts, the prolific summers of 2021 and 2022-which saw job seekers spoilt for choice-are now missing as employers are no longer in a rush to fill abundant vacancies.
The national unemployment rate has also seen a rise-up to 4.1% in June. Prior to this, the job market witnessed an extended period of unemployment rates below 4%, a streak unseen since the 1960s. Daniel Zhao, the lead economist at Glassdoor, highlights how stiff conditions for securing a job entry point and a sluggish hiring rate are curbing healthy job market rotation.
Furthermore, a survey by the National Association of Colleges and Employers found a declining trend among employers in terms to hiring recent graduates. Following an aggressive hiring phase, employers are projecting a 5.8% reduction in fresh graduate hiring compared to last year.
As explained by Bunker, "Recent college grads are finding it harder to secure a job compared to the scenario a few years ago." The primary cause is attributed to a significant hiring withdrawal in sectors such as tech, consulting, and marketing which traditionally employed recent graduates, with job advert figures deploying a stark plunge compared to two years ago.