‎US Unemployment Rate for Recent College Graduates Surpasses National Average, Bank of America Institute Reports

By: Shawn
‎The unemployment rate for recent college graduates in the United States has risen above that of the overall workforce, signaling a major shift from pre-pandemic labor market patterns, according to a new analysis by the Bank of America Institute.
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‎US unemployment for recent graduates now exceeds national levels, with Gen Z job seekers facing record challenges from AI and global trade shifts.
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‎For much of the last decade, Americans aged 22 to 27 holding at least a bachelor’s degree consistently recorded lower unemployment than the broader labor force. That trend has now reversed. Since the disruptions triggered by COVID-19, the jobless rate for this group has remained higher than the national average. In July 2025, the U.S. unemployment rate increased to 4.2%, with recent graduates experiencing even higher levels of joblessness.
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‎Gen Z Faces Record Labor Market Entry Challenges
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‎The report highlights that more than 13% of unemployed Americans in July were “new entrants,” defined as individuals seeking work for the first time. This marks the highest share since 1988 and reflects significant challenges for Gen Z workers attempting to launch their careers. Rising economic uncertainty, coupled with the cooling labor market, has limited entry-level job opportunities. The analysis further points to rapid AI adoption and heightened global trade tensions as contributing factors in reducing the availability of positions for less experienced candidates.
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‎Broader Economic Pressures and Industry Impacts
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‎Bank of America’s research connects the difficult outlook for recent graduates to wider macroeconomic headwinds. Automation and global trade disputes are reshaping employment opportunities and affecting younger applicants at disproportionate levels, particularly those lacking substantial work experience.
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‎Data Sources and Methodology
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‎The findings are based on a blend of U.S. Census Bureau and Bureau of Labor Statistics data, supplemented by Bank of America’s proprietary transaction insights. Monthly unemployment figures were seasonally adjusted and smoothed, focusing on individuals not enrolled in school.
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‎The trend has also been observed in independent research. Goldman Sachs reported in July 2025 that the traditional “safety premium” of a college degree has weakened, with degree-holders now facing unemployment rates closer to or above national averages. Additionally, a recent Stanford University study found that artificial intelligence is exerting a significant and disproportionate impact on entry-level workers, further challenging young job seekers in the U.S. labor market.

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