For the first time in decades, Americans with four-year college degrees make up a full quarter of the total unemployed, Bloomberg reported. The latest government data shows a clear slowdown in white-collar jobs this year. Bachelor’s degree holders are struggling to find work. Unemployment for other education levels remains mostly steady. Americans with four-year college degrees now make up a record 25% of all unemployed.
US college grads face rising unemployment
The US Bureau of Labor Statistics released government-shutdown-delayed figures on Thursday showing that the unemployment rate for people with bachelor’s degrees rose to 2.8% in September. This is an increase of half a percentage point from a year ago.
That means over 1.9 million Americans aged 25 and older with a college degree are out of work, making up one in every four unemployed people. This level has never been seen before in records going back to 1992.
Young graduates, especially for Americans aged 20 to 24, unemployment climbed to 9.2% in September, an increase of 2.2 percentage points from a year earlier. Such a dramatic rise is normally seen only in recessions.
High-skilled sectors like professional and technical services, which include computer systems design, scientific research, and management consulting, have seen a drop in headcount over the first nine months of 2025, according to Bloomberg.
Unemployment among older Americans remains below 4% and has seen only minimal increases. But not all industries are hiring. Only two sectors, health care and social assistance, and leisure and hospitality, have added jobs this year, generating a combined 690,000 positions, according to Bloomberg. Outside these sectors, US employment has actually declined slightly, losing about 6,000 jobs.
AI and layoffs impact the white-collar job market
Experts say that the rise in unemployment among college-educated workers is also driven by the artificial intelligence and automation era, which has already resulted in mass layoffs. Michael Feroli, chief US economist at JPMorgan Chase, warned that these trends should increase fears of AI-related job losses.
2025 has already seen massive shake-offs across the job market, including major corporations like Amazon, Target, and Starbucks. Companies are now replacing human roles with AI or restructuring teams. Verizon became the latest to announce cuts, saying it will lay off over 13,000 employees to reduce its non-union workforce by up to 20%.
John Williams, president of the Federal Reserve Bank of New York, described the current situation as a “perfect storm” for college graduates. Normally, graduates enter the workforce smoothly, but this year, that pipeline has slowed dramatically. “College graduates are being swept into the labor market as they get out of college, and that has not happened as much this year,” he told Bloomberg.
