New graduates are facing one of the toughest job markets in decades. The share of unemployed Americans who are brand-new to the workforce — meaning they have no prior work experience — has reached its highest level in 37 years.
Why it matters: It highlights how cautious companies remain about hiring amid uncertainty over trade, tariffs, and policy.
By the numbers:
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In July, 13.4% of unemployed Americans were “new labor force entrants,” including recent high school and college graduates.
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That’s the highest share since 1988, when Baby Boomers were entering the workforce en masse.
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The analysis comes from the Federal Reserve Bank of Richmond.
The big picture: While overall unemployment remains relatively low at 4.2%, job seekers are struggling more than workers who already have jobs. For those ages 22–27, the unemployment rate was 7.4% in the second quarter, and even degree-holders in that age group are seeing jobless rates comparable to those last recorded in the 2010s (excluding the pandemic shock in 2020).
Zoom in: Long-term joblessness is also climbing. About 25.2% of unemployed workers have been without a job for at least 27 weeks — the highest since early 2022.
The bottom line: This slow hiring environment is a “double whammy” for Gen Z, says Richmond Fed economist John O’Trakoun. Many began college during pandemic lockdowns, attending classes on Zoom from their bedrooms. Now, they’re running headfirst into a sluggish labor market.