Why Gen Z are finding it harder than ever to land first job? Graduate unemployment hits 37-year high in US

Fresh graduates in the United States are finding it harder than ever to get their first job, according to new data showing unemployment among new entrants to the labour force has reached its highest level in 37 years.

Graduate unemployment at record levels

Figures from the Federal Reserve Bank of Richmond reveal that 13.4% of unemployed Americans in July were new to the workforce, including recent school and college graduates. That is the highest share since 1988, when the Baby Boomer generation was entering the job market in large numbers.

The figures highlight how cautious employers remain in the face of uncertainty around tariffs and government policy. While overall unemployment is relatively low at 4.2%, those without jobs are finding it far harder to secure work compared with previous years.

College degree holders still fare better

The unemployment rate for young Americans aged 22 to 27 with a college degree is at levels not seen since the early 2010s, excluding the pandemic years. However, graduates are still in a stronger position than peers without degrees. The overall jobless rate for this age group stood at 7.4% in the second quarter.

Long-term unemployment rising

The Richmond Fed also pointed to a sharp rise in long-term unemployment. People out of work for at least 27 weeks made up 25.2% of the total unemployed, the highest figure since February 2022.

John O’Trakoun, the Richmond Fed economist who led the study, said the sluggish hiring market is a “double-whammy” for Gen Z. Many started their university years online during the pandemic and are now facing one of the weakest job markets in decades. “The sluggish labour market is yet another hurdle to clear,”headded.