But during the pandemic, joblessness among recent college grads began consistently exceeding the overall rate. And in early 2022, the separation between the two trend lines started widening.<\/p>\n
By contrast, the jobless rate for all college graduates across every age group has stayed well below the total rate for at least 35 years.<\/p>\n
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According to the latest data, the unemployment rate for recent grads was 4.8% in June, while it was 4.0% for all workers.<\/p>\n
\u201cWhy this change? It may be due to the increase of college educated people in the workforce generally these days, so the new entrants are competing for jobs with more experienced college graduates,\u201d Yardeni wrote.<\/p>\n
Citing the\u00a0Education Data Initiative<\/a>, he added that the percentage of Americans with a bachelor\u2019s degree or higher is now 37.5%, up from 25.6% in 2000. And between 1993 and 2023, the number college graduates soared\u00a074.9% while those with only a high school diploma increased\u00a014%.<\/p>\n Meanwhile, a separate New York Fed analysis<\/a> that breaks down unemployment rates by college major shows that graduates with degrees in computer engineering, computer science, physics, and information systems and management have higher jobless rates than workers overall.<\/p>\n \u201cThis suggests that too many kids opted to go into computer-related fields and faced a tougher time than expected landing a good job,\u201d Yardeni said.<\/p>\n To be sure, evidence is mounting that AI is shrinking opportunities, especially at the\u00a0entry level<\/a>.\u00a0And Yardeni highlighted a recent survey<\/a>\u00a0by Cengage Group\u00a0that showed AI is among the top reasons that more employers plan to hire the same or fewer entry-level workers than last year.<\/p>\n But he also cited a 2023\u00a0paper<\/a>\u00a0by the National Bureau of Economic Research\u00a0that found that AI actually resulted in corporations having more lower-level employees who are able to use the technology, which allowed them to make decisions without management, creating a flatter organization.<\/p>\n And don\u2019t forget President Donald Trump\u2019s tariffs, which have stoked some inflation and boosted uncertainty about the economy, making it difficult for companies to plan ahead and grow their headcount, Yardeni added.<\/p>\n Others on Wall Street are also skeptical about AI\u2019s role in the Gen Z job crisis<\/a>. UBS chief economist Paul Donovan described the U.S. labor market as peculiar, pointing out that young workers in the euro zone have record low unemployment, their rate in the U.K. has fallen steadily, and their labor participation in Japan is near all-time highs.<\/p>\n \u201cIt seems highly implausible that AI uniquely hurts the employment prospects of younger US workers,\u201d he wrote in a note on Friday.<\/p>\n But after years of being told that college was a necessity to get a good job, the pendulum may be swinging the other way. Trade jobs have become more popular, especially among Gen Zers who relish the idea of not being stuck in front of a computer and see a future that\u2019s not so vulnerable to AI.<\/p>\n At the same time, the Gen Z job crisis is colliding with the student debt crisis, making young people more reluctant to borrow massive amounts of money to obtain a degree with questionable value.<\/p>\n Not surprisingly, Americans have a much dimmer view on college now. According to a Gallup Poll earlier this month<\/a>, only 35% say going to college is \u201cvery important\u201d \u2014 a record low \u2014 down from 51% in 2019 and 75% in 2010.<\/p>\n