May 20, 2024 - Economy

Class of uncertainty: 2024 grads grapple with inflation, job market questions

Illustration of George Washington wearing a graduation cap

Illustration: Rebecca Zisser/Axios

College graduates will join the workforce at a time when the hiring is expected to cool and inflation is still higher than at any point in their formative years.

Why it matters: The outlook is no doubt better than four years ago, when most entered college alongside a pandemic-wrecked economy. Still, grads are grappling with high-stakes questions similar to those facing economists — including when price hikes will slow and how much the labor market might need to soften for that to happen.

What they're saying: "From my conversations with these students and other students, they feel a lot of uncertainty," San Francisco Federal Reserve Bank president Mary Daly told Axios on Friday after delivering a commencement speech at the University of San Francisco.

  • "I remind them that the economy they're going into is one with a very solid labor market and pockets of strength," Daly said. "We have an ongoing period of real wage growth, which frankly we didn't have for almost two years."
  • "Someone asked me, 'Is it still OK to go into tech?,' and I said yes," Daly said, referencing recent sector-wide layoffs. "A weaker situation for them relative to their experienced history doesn't mean a weak situation."

State of play: The labor market for recent college grads is notably worse than for the population as a whole — and less hospitable than it was before the pandemic or in 2022.

  • The unemployment rate among college graduates between ages 20 and 24 has averaged 5.8% over the last 12 months. That number was 5.1% in 2019. The unemployment rate among all Americans has averaged 3.7% over the last year.

The intrigue: Many of this year's graduates will, for the first time, enter a professional workforce and economy that's been reshaped by the pandemic.

  • "We'll be celebrating the ability to be more flexible, work from home and things of that sort," said Daly, who began her commencement speech by asking how many students had missed their high school graduation ceremonies because of COVID-19.
  • "The part of it that is challenging is things cost more money — basics, transportation, food and energy — and inflation is still not to target," Daly said.
  • "The world just doesn't feel as balanced and it doesn't seem like the opportunities to grow your income and your well-being are quite as good as they were yet in 2019," Daly said.

The bottom line: "We're trying to bring inflation down as gently as we can and working hard at it," Daly added. "I still think it's quite possible, but until it happens, people are going to feel uncertain about, really, if that can be accomplished."

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