This article provides the May 2013 BLS monthly unemployment and employment data and analysis for college grads aged 20-24.
Each month, the Bureau of Labor Statistics gathers, but does not publish, employment information on 20-24 year olds. This article uses BLS data to analyze the May 2013 unemployment situation for bachelor’s degree graduates. Unemployment and employment data vary significantly from month to month for this cohort, but over time, trends can be seen.
A college education is perceived as a road to success. In fact, close to 87% of all entering freshmen say a primary reason for going to college is to get a good job. While college has been seen as a vehicle for upward mobility for decades, it is only relatively recently that some have started to question the value of a college education. The average 4-year college senior now graduates with over $26,000 of debt.
It is particularly instructive to look at unemployment rates of young college graduates aged 20-24 as they are the group with the worst debt burden. The first two graphs show the 20-24 year old cohort exclusively, with the first chart looking at this year (Jan,2012—May,2013), and the second chart comparing monthly unemployment rates over the last six years.
The May unemployment rate (8.2%) is higher than expected, given that most new 2013 graduates have not yet joined the labor market. In fact,the percentage of unemployed recent grads in May was the same as in May, 2010, at the worst of the recession.
The unemployment rate would have been even worse, had the percentage of new grads in the labor market remained the same. What appears to have happened is that new grads understand the market is tough, and a significant number have either dropped out of the market or–in the case of new graduates–decided to not even apply for positions immediately after graduation. Statistics show that the participation rate for young, recent graduates has been on a fairly steady decline. In May, 2010, 81.5% of grads aged 20-24 were in the labor market. This compares to 80.5% in May 2011, 80% in May 2012, and 78.4% in May 2013.
One factor to consider when assessing the employment situation for recent graduates is that unemployment rates vary significantly by month. However, as the following chart illustrates, the monthly rates do tend to rise and fall in a similar pattern each year:
Given recent monthly employment data for college grads aged 20-24, new grads will have to become savvy about their job searches in a hurry. The situation won’t get much easier until the economy has absorbed a large number of 2013 grads.