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Why is the job market so tough for recent college graduates?

Jun 9, 2026 | Blog

Are you or someone you know feeling overwhelmed searching for jobs after graduation? Recent college graduates are facing some of the highest unemployment rates we’ve seen in years. Continue reading as we share insights from J.P. Morgan on why this might be the case.

“A college degree has long been a reliable form of insurance against unemployment, with graduates more competitive in the labor market and more likely to land a job on their desired track. That advantage has, curiously, now reversed. A recent graduate today is more likely to be out of work than the average American, with an unemployment rate of 5.6% against 4.2%.

The popular narrative is that AI is automating the entry-level tasks firms once handed to junior workers. But employment trends suggest a different structural force at work: the jobs graduates want are not the jobs the economy is short of, and this mismatch has been building well before ChatGPT.

Among young workers, the strain is specific to recent grads
If AI were broadly eroding demand for young workers, the damage would show up across the whole cohort, yet young workers are not unusually stressed. Unemployment for 20-24 year-olds runs around 8%, only modestly above its 2023 low of 6%, and labor force participation has held steady. The low-hiring market may feel unwelcoming to young people, but the strain is specific to recent college graduates, not entry-level workers broadly.

A skills and preferences mismatch
Hiring has narrowed meaningfully in recent years and shifted away from the jobs graduates typically aim for. Since the start of 2025, payrolls have grown just 26,000 a month, almost entirely led by private education and health services (+56,000) while finance, professional services, tech and government have been shrinking. The “care economy” is projected to continue demanding significant workers, but mostly in lower-wage home- and personal-care roles that don’t require a degree.1 Meanwhile, more coveted sectors are pulling back, whether for macro reasons or in anticipation of AI automation, with tech employment down about 11% from its 2022 peak.

There are many reasons why commencement speakers talking up AI may expect some boos from the crowd this year, but for now, AI taking their jobs should probably not be one of them.

To read more click here.

Navigating a tough job market is hard enough.Whether you’re a recent grad just starting out or a parent helping a child/grandchild find their footing, we’re here to help you build a plan that works in any economic environment. Schedule a complimentary consultation with us.

And as always, your weekly market update is here.

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