Recent college graduates are finding some relief in the job market, although many continue working in positions that typically do not require a degree.
The Federal Reserve Bank of New York’s latest quarterly update puts recent-graduate unemployment at 5.2% in the third quarter of 2026, its lowest level in more than a year.
Underemployment moved in the opposite direction, edging up to 42.5%.
The figures measure different problems. Unemployment concerns people seeking work who do not have jobs. Underemployment, in this analysis, describes graduates working in occupations that generally do not require a bachelor’s degree.
The Fed defines recent graduates as people ages 22 to 27 with at least a bachelor’s degree. Its figures are national, rather than specific to New York or individual colleges.
The challenges predate this quarter. In a May research advisory, the New York Fed reported that recent-graduate unemployment had risen from 3.6% in March 2019 to 5.6% in March 2026.
The latest improvement therefore comes after a period of increasing difficulty for young degree holders entering the workforce.
The Fed cautions that underemployment does not necessarily mean low-paid or unskilled work. Some graduates gain experience in jobs outside traditional degree requirements before moving into other roles.
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