Gen Z is facing a job market double-whammy
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New graduates are having an especially tough time landing a job right now: The share of unemployed Americans that are new to the workforce is at a 37-year high.
Why it matters: It's a sign of how reluctant companies have been to hire amid ongoing economic uncertainty over tariffs and policy.
By the numbers: 13.4% of unemployed Americans in July were "new labor force entrants," those looking for jobs with no prior work experience, including new high school and college graduates.
- It's the highest number since 1988, as the Baby Boomer generation was flooding the job market.
- That's from a new analysis of government data from the Federal Reserve Bank of Richmond.
The big picture: Folks with jobs are hanging on to them at the moment; unemployment is at a relatively low 4.2%. But those without work are having a hard time — facing one of the toughest job markets in years.
- The jobless rate for college degree holders, age 22-27, has been hovering at a rate last seen during the 2010s (excluding 2020 data).
- Still, they are at a clear advantage among their peers without degrees. Overall the unemployment rate for everyone age 22-27 was 7.4% in the second quarter of the year.
Zoom in: Another sign of how hard it's become to get a job? The share of unemployed workers who've been without a job for 27 weeks or longer is up sharply, the Richmond Fed report says.
- Such long-term unemployed people make up 25.2% of all unemployed workers — the highest since February 2022.
The bottom line: The frozen hiring market is a "double-whammy" for Gen Z, says John O'Trakoun, an economist at the Richmond Fed who did the research.
- Many of these job hunters entered college at the height of pandemic lockdowns and started their university years on Zoom in their childhood bedrooms.
- The sluggish labor market is yet another hurdle to clear.
