By Megan Leonhardt

Recent college graduates are still having a tougher time finding a job than the average worker, but there are some very early signs the struggle could be easing up a bit.

The unemployment rate among recent college graduates didn't shift much in the first quarter, hovering around 5.6% as of March, the same rate as December 2025, according to the latest data released by the Federal Bank of New York on Tuesday.

Americans who recently earned their bachelor's degree have faced a challenging job market in recent years. Heightened economic and policy uncertainty has kept many employers from making big hiring pushes, plus there's a continuing skills mismatch between retiring workers and younger entrants. In some fields, companies have also cited the adoption of artificial intelligence as a reason for lower rates of entry-level hiring.

While unemployment among recent graduates is still notably higher than the 4.3% national average, there are signs that more stable conditions could be ahead. The latest unemployment print for recent college grads is a bit lower than the four-year high of 5.8% jobless rate triggered in April 2025 and then again in September, according to the NY Fed data.

The contraction in the number of available positions for younger workers may also be slowing, though the U.S. is still far from robust hiring conditions. After falling dramatically for the classes of 2024 and 2025, job postings are only down 2% down from last year on Handshake, a talent recruitment app for early-career professionals. And recent grads are finding jobs a bit faster than compared with a year ago, with 77.2% gaining employment within three months of graduating, ZipRecruiter reports.

Demand for interns, which fell last year to the lowest level since 2020, also picked up at the start of 2026, according to Indeed's data. It's now on pace with 2024 levels.

Underemployment among recent grads -- which measures people holding jobs that don't make use of their skills or degrees or don't offer full employment -- also edged down consistently over the past four months to 41.5% in March.

Looking more broadly, the unemployment rates among all young workers aged 22-27 improved slightly during the first quarter, with the overall jobless rate hovering at 7.2% as of March, compared with 7.7% in December.

That aligns with broader labor trends. Hiring picked up in March, according to the latest Job Openings and Labor Turnover survey data released Tuesday. The number of hires increased by 655,000 to 5.6 million in March.

The number of job openings, however, was largely unchanged at 6.9 million in March. The number of layoffs did tick up slightly to 1.87 million, up from 1.71 million in February.

The outlook for younger workers could flounder if the effects of the recent oil shock lead to a pullback in discretionary spending. Since the onset of the Iran war, prices at the pump have risen from an average of less than $3 per gallon to $4.48 per gallon nationwide on Tuesday, according to AAA.

Young workers, however, are disproportionately employed in industries like retail and leisure -- sectors that are reliant on consumer spending, the Bank of America Institute's Liz Everett Krisberg and David Tinsley write.

So far, households have weathered the higher gas prices, largely thanks to the cushion provided by higher average tax refunds. But if gasoline prices remain elevated for a prolonged period, it could squeeze household finances and cause a pullback in spending. That could cool job prospects for younger workers, BofA's economists note.

Write to Megan Leonhardt at megan.leonhardt@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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May 05, 2026 13:54 ET (17:54 GMT)

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