U.S. unemployment may have hit its lowest rate in decades this January, but many Americans fresh out of college aren’t seeing gains like you might imagine from the robust job market.
The Federal Reserve Bank of New York’s latest data on how recent graduates are faring in the labor market shows a college degree still pays off in terms of employment levels and earnings compared to only a high school diploma.
But numbers released Friday show that the unemployment rates for young college grads can vary dramatically depending on their choice of majors. What's more, wages for recent grads are coming up short in the face of sky-high inflation.
What the data says
- Median annual earnings adjusted for inflation for recent college graduates (people 22 to 27 with at least a bachelor's) decelerated from $56,156 in 2021 to $52,000 last year, the steepest decline in earnings recorded since 2004.
- The wage figures in the study are in 2022 dollars, and last year stood out for having the highest inflation rate in decades. The takeaway is that the money earned by recent grads in 2022 didn't go as far as their typical earnings in previous years. In 2020, median annual earnings for this group reached a record high of $56,526 (in 2022 dollars), and in 2002, the corresponding figure was $55,314.
- Meanwhile, people ages 22 to 27 with a high school diploma (and not a college degree) saw their median annual wages go up from $32,398 in 2021 to $34,320 last year.
- The unemployment rates for fresh grads was 4.1% in December 2022, lower than the 4.7% in December 2021 but a slight uptick from 3.9% recorded last October.
- Workers ages 22 to 27 without a bachelor's degree fared the worst when it came to hiring, with an unemployment rate of 7.6% in December 2022, compared to 3.5% for all workers.
- Unemployment rates for college grads overall were stable in 2022, hovering around 2% in the last half of the year following consistent declines from June 2020 to May 2022.
College majors with the lowest unemployment rates
The following rankings apply to recent college grads — people ages 22 to 27 with at least a bachelor's degree:
- Miscellaneous education (0.6%)
- Nursing (1.3%)
- Construction services (1.4%)
- General education (1.8%)
- Elementary education (1.8%)
- Nutrition sciences (1.8%)
- Architecture (2.1%)
- Business analytics (2.2%)
- Agriculture (2.4%)
- Secondary education (2.6%)
College majors with the highest unemployment rate
- Fine arts (12.1%)
- Philosophy (9.1%)
- Sociology (9%)
- Family and consumer sciences (8.9%)
- Mass media (8.4%)
- Commercial art and graphic design (7.9%)
- Foreign language (7.8%)
- Performing arts (7.6%)
- Public policy and law (7.4%)
- Engineering technologies (7.1%)
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