Making the Bad Economy Case: College Grad Edition II

If we wanted to know what the job market looks like for recent college graduates, we would probably start by looking at their unemployment/employment rates. On the other hand, if we wanted to try to make the labor market for recent college grads look bad, we could follow the Washington Post’s lead and look at the re-employment rates for college grads who report being unemployed.

While the latter statistic is interesting, it is only telling us about the employment prospects for the roughly 4.0 percent of college grads who report being unemployed in any given month. It tells us nothing about the job prospects for the 96 percent of college grads in the labor market who have jobs.

As it turns out, the prospects for recent college grads who end up being unemployed is not very good. This is what the Washington Post chose to highlight in a piece headlined, “Degree? Yes. Job? Maybe Not Yet.”

The article starts out by talking about the re-employment rate for new entrants to the workforce and shows us that it is far lower than for more experienced workers. This is shown with a large graph.

Next in the piece we do get the employment rate for all young people, not just recent grads, which has fallen in recent months back to levels reached in 2016, after previously reaching levels that were close to pre-pandemic peaks.

It is only towards the bottom of the piece that we get the unemployment rate for recent grads (4.3 percent). This is up slightly from the 3.9 percent low hit in 2022, but still low by most standards and very comparable to the rates we were seeing just before the pandemic.

As a practical matter, it is hard to imagine that someone could look at a 4.3 percent unemployment rate and say college grads are having a hard time finding jobs. Oddly, this is the second time in two weeks we saw this re-employment rate for recent grads highlighted as meaning that college grads are having trouble getting jobs.

The market for recent college grads continues to look pretty good, but the market for bad news on the economy is red hot.

This first appeared on Dean Baker’s Beat the Press blog.

Dean Baker is the senior economist at the Center for Economic and Policy Research in Washington, DC.