Data from the Federal Reserve Bank of New York shows the worst unemployment rates for recent college graduates in years.
In the first three months of 2025, the national unemployment rate sat at about 4%.
The unemployment rate for recent college graduates rose from 4.8% in January to 5.8% in March.
Historically, college graduates have always had a lower rate of unemployment compared with the national average, dating back to 1990.
That first changed in 2019, with unemployment peaking for all ages in June 2020, the height of the COVID-19 pandemic.
College graduate unemployment has been higher than the general rate since, but 2025 marks the worst rate since 2021.
“That’s very unusual,” said Joseph Von Nessen, a research economist at the Darla Moore School of Business at the University of South Carolina.
He said unemployment rates for recent college graduates have consistently been about 1% lower than the overall rates until now.
Why the change?
Von Nessen said there are three major reasons: over-hiring in the tech sector, artificial intelligence, and current trade and tariff policy.
During the pandemic, technology companies had to hire more employees and increase their capacity as more people were staying home and using online services.
Once consumer spending habits started to return to pre-pandemic levels, technology companies found themselves with too many employees.
“The tech sector tends to hire and employ mainly younger workers, disproportionately younger workers relative to the labor force as a whole,” Von Nessen said.
A.I. is also creeping up on the job market.
Many companies are beginning to use it in place of those entry-level positions new college graduates rely on out of school.
It’s similar to the Industrial Revolution, said Neil Burton, the executive director of the Center for Career and Professional Development at Clemson University.
“A lot of jobs were overtaken by machinery. You know, now we have the cotton gin, so we don't need as many people to sort the cotton. Now this revolution is threatening some white collar fields… investing, finance, accounting, the legal profession, even some counseling,” he said.
Finally, some companies are holding off on hiring due to uncertainty with trade and tariff policy.
Especially in South Carolina, according to Frank Rainwater, the director of the state’s Revenue and Fiscal Affairs Office.
In an April meeting, Rainwater told the Board of Economic Advisors that South Carolina is more exposed than most states to the impacts of tariffs due to the state's strong international trade chops.
Tariffs, he said, lead to uncertainty.
“Uncertainty tends to breed paralysis,” Von Nessen said.
“When [businesses] go into wait and see mode, they're less likely to make any type of significant investments, because they don't know what the market landscape is going to look like, and so that can include investments in capital. It can also include investments in workers,” he added.
How can students get ahead?
Casey Matthews is a recent Mass Communications graduate from the University of South Carolina. She's applied to over 20 jobs so far.
"I think at first, I would spend a lot more time kind of picturing myself in a role that I was applying for, and now I feel like I'm more pessimistic," she said.
Burton said this was a common feeling, but it's important to stay motivated and keep applying.
He also stressed the importance of talking to people who already work in the job you want to pursue.
"If 15 years from now, you want to be sitting in a certain kind of seat, a certain position. Find somebody that's sitting in that position now and ask them for 15 minutes of their time to say, how did you get to where you are?" He said.
Burton added that it's easy to take every rejection personally, even though it's the most common outcome.
"You're going to hear no a lot more than you hear yes. That is not a judgment on you as a person or your value as a person,” he said. "You just have to have to be persistent and resilient."
Experts all echoed similar things, saying there’s no need to panic. Resilience is key.
