The US labor market is showing clearer signs of softening.
And the strain is falling hardest on Americans just entering the job market. Labor Department data released Friday showed the unemployment rate for workers ages 16 to 24 climbed to 10.5% in August, the first time it’s topped 10% since the pandemic.
The data comes against a backdrop of an increasingly tough job market for newly minted college grads. The unemployment rate for recent college graduates has consistently outpaced that of the broader workforce in the past several years, reversing a pre-pandemic trend when degree-holders typically fared better, according to a report from the Bank of America Institute published earlier this week.
In June 2025, the unemployment rate for recent graduates was 4.8%, compared with 4% for all workers and 7.4% for young workers without a degree, the report said, citing BLS and Census Bureau data compiled by the New York Fed.
The Institute defines “recent graduates” as workers ages 22 to 27 with at least a bachelor’s degree, while “young workers” are those in the same age range without a bachelor’s degree.
The divergence between the jobless rate for new grads and the broader population began emerging in the aftermath of the pandemic, with recent graduates starting to see consistently higher jobless rates compared to the broader labor force beginning in 2021. Economists pointed to particular weakness in white-collar occupations, with consulting, tech, finance, and other degree-heavy fields facing layoffs and hiring freezes after the pandemic boom.
“People with college degrees like recent graduates might be finding themselves in an increasingly competitive environment that doesn’t necessarily guarantee the same level of employment security that it once did,” Taylor Bowley, economist at the Bank of America Institute, told Yahoo Finance.
Bowley pointed to heightened uncertainty around tariffs and investment decisions, as well as new technologies reshaping entry-level roles. That uncertainty has only deepened amid the turbulence of President Trump’s unprecedented second term. And while some hesitation is typical ahead of elections, Bowley said this moment feels different.
“It’s not atypical to see uncertainty before an election, because businesses wait to see what policies a new administration might bring,” she said. “But this is a different kind of uncertainty — one that’s been quite persistent since the start of the year and seems to be ongoing.”
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