{"id":290468,"date":"2026-07-20T10:00:17","date_gmt":"2026-07-20T14:00:17","guid":{"rendered":"https:\/\/ncrc.org\/?p=290468"},"modified":"2026-07-17T13:37:23","modified_gmt":"2026-07-17T17:37:23","slug":"black-and-hispanic-college-graduates-face-a-tougher-job-market-july-2026-race-jobs-and-the-economy-update","status":"publish","type":"post","link":"https:\/\/ncrc.org\/black-and-hispanic-college-graduates-face-a-tougher-job-market-july-2026-race-jobs-and-the-economy-update\/","title":{"rendered":"Black and Hispanic College Graduates Face a Tougher Job Market: July 2026 Race, Jobs and the Economy Update"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">According to the Bureau of Labor Statistics\u2019 (BLS) June jobs report, the national economy added 57,000 jobs, while the unemployment rate dropped slightly to 4.2%. The former was substantially below <\/span><a href=\"https:\/\/www.investopedia.com\/june-jobs-report-preview-12010465\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">economists\u2019 expectations<\/span><\/a><span style=\"font-weight: 400;\"> of 115,000 jobs. Monthly job gains have trended downward since March, going from 214,000 to 57,000.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The drop in the unemployment rate was not because more people found new employment but because over <\/span><a href=\"https:\/\/fred.stlouisfed.org\/series\/LNS17900000\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">200,000 unemployed people left the labor force<\/span><\/a><span style=\"font-weight: 400;\"> last month and stopped looking for work.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The labor market remains lukewarm as job openings, layoffs and resignations remained largely unchanged in May according to BLS\u2019 data. While the rate of unemployment remains low overall, the slow labor market is affecting one group in particular: new college graduates.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">As college graduation season ends, many graduates are struggling to enter the workforce. Their topline unemployment rate, officially called the U-3 rate, rose to\u00a0 5.3% in April, an increase from the January 2025 rate of\u00a0 4.7%. The U-3 rate is the percentage of the <\/span><a href=\"https:\/\/www.bls.gov\/cps\/definitions.htm#ur\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">labor force that is unemployed<\/span><\/a><span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The <\/span><a href=\"https:\/\/fred.stlouisfed.org\/series\/U6RATE\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">U-6 rate<\/span><\/a><span style=\"font-weight: 400;\">, commonly called the underemployment rate, includes unemployed workers plus involuntary part-time workers and <\/span><a href=\"https:\/\/www.investopedia.com\/terms\/d\/discouraged_worker.asp\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">discouraged workers<\/span><\/a><span style=\"font-weight: 400;\">. The U-6 rate for new college graduates has risen faster than their U-3 rate. Since January 2025, the U-6 rate increased from 8.2% to a high of 10% in April.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The chart below shows both the U-3 and U-6 rates by race:<\/span><\/p>\n<p><iframe id=\"datawrapper-chart-6NNte\" style=\"width: 0; min-width: 100% !important; border: none;\" title=\"Unemployment Among Recent College Graduates\" src=\"https:\/\/datawrapper.dwcdn.net\/6NNte\/3\/\" height=\"505\" frameborder=\"0\" scrolling=\"no\" aria-label=\"Line chart\" data-external=\"1\"><\/iframe><script type=\"text\/javascript\">(function(){function e(){window.addEventListener(`message`,function(e){if(e.data[`datawrapper-height`]!==void 0){var t=document.querySelectorAll(`iframe`);for(var n in e.data[`datawrapper-height`])for(var r=0,i;i=t[r];r++)if(i.contentWindow===e.source){var a=e.data[`datawrapper-height`][n]+`px`;i.style.height=a}}})}e()})();<\/script><\/p>\n<p><span style=\"font-weight: 400;\">The increase in the U-6 rate suggests that a portion of new college graduates are turning to part-time and gig work as suitable full-time work becomes harder to find. <\/span><a href=\"https:\/\/fortune.com\/2026\/04\/24\/gen-z-entrepreneurship-gig-work-freelance-entry-level-jobs-corporate-america\/\" target=\"_blank\" rel=\"noopener\"><i><span style=\"font-weight: 400;\">Fortune Magazine<\/span><\/i><\/a><span style=\"font-weight: 400;\"> reported on new college graduates turning to gig and entrepreneurial work as entry-level job openings have declined while the number of applicants for the remaining jobs has increased. This has led some to pursue work outside of their formal areas of study. According to data from the Federal Reserve Bank of New York, <\/span><a href=\"https:\/\/www.newyorkfed.org\/research\/college-labor-market#--:explore:underemployment\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">41.5% of recent college graduates <\/span><\/a><span style=\"font-weight: 400;\">work in a job that doesn&#8217;t require a college degree.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Breaking down the data by race reveals a couple of interesting trends. First, both the U-3 and U-6 rates are higher for Black and Hispanic graduates compared to White graduates. The unemployment rate for Black graduates peaked at 12.3% in November of last year and then declined by over 5 percentage points (pp) to 6.9%, while the underemployment rate declined only 2 pp over the same period. Despite this decline, Black underemployment remains elevated compared to the beginning of 2025. Similarly, the U-6 rate for Hispanic college graduates has been steadily increasing since mid-2022.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A second important finding from the data is that not only are Black and Hispanic college graduates\u2019 unemployment rates rising, but they are substantially higher relative to White graduates. The Black grads U-3 rate reached a low of 3.3% in March of 2024 and then experienced a spike to 6.9% in April, a 110% increase. For Hispanic grads, their U-3 rate increased by 80% from a low of 4.1% in January of 2025 to 7.3% in April. For White grads, their U-3 rate increased by only 36% from an October 2022 low of 3.18%.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">While media attention has focused on unemployment among new college graduates, and rightfully so, it is more endemic for Black and Hispanic graduates. For college graduates overall, the reason for their employment woes has been broadly attributed to a combination of broader labor market weakness and AI changing the hiring decisions of companies.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Firms facing higher costs, <\/span><a href=\"https:\/\/libertystreeteconomics.newyorkfed.org\/2026\/07\/effect-of-tariffs-on-u-s-small-businesses\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">due in part to tariffs<\/span><\/a><span style=\"font-weight: 400;\">, are hiring fewer workers, including recent college graduates. Some of the layoffs result from poor management decisions in the past. For example, <\/span><span style=\"font-weight: 400;\">some <\/span><span style=\"font-weight: 400;\">companies <\/span><a href=\"https:\/\/www.wsj.com\/economy\/jobs\/u-s-companies-are-still-slashing-jobs-to-reverse-pandemic-hiring-boom-abf1b94e\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">over-hired in the post-pandemic boom<\/span><\/a><span style=\"font-weight: 400;\"> and have now begun layoffs. These experienced unemployed workers are sometimes competing for jobs alongside new college graduates. These broader labor market trends are negatively impacting job hiring for all workers, including for recent college graduates.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">While companies, particularly tech firms, have announced tens of thousands of <\/span><a href=\"https:\/\/www.wsj.com\/economy\/jobs\/layoffs-2026-tracker-784ea69f\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">layoffs this year<\/span><\/a><span style=\"font-weight: 400;\">, the biggest challenge for new entrants to the labor market is the <\/span><a href=\"https:\/\/www.technologyreview.com\/2026\/05\/26\/1137865\/its-time-to-address-the-looming-crisis-in-entry-level-work\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">drop in entry-level hiring<\/span><\/a><span style=\"font-weight: 400;\">. Firms are adopting <\/span><a href=\"https:\/\/fortune.com\/2026\/03\/18\/corporate-america-ai-hiring-freeze-workforce-architecture\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">a wait-and-see approach<\/span><\/a><span style=\"font-weight: 400;\"> to AI by holding off on <\/span><a href=\"https:\/\/businessjournaldaily.com\/ai-driving-decline-in-entry-level-hiring-survey-finds\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">hiring junior workers<\/span><\/a><span style=\"font-weight: 400;\"> until they better understand the capabilities of AI systems and who they can replace. Additionally, companies that are leaning into AI investments are letting workers go to <\/span><a href=\"https:\/\/www.reuters.com\/business\/world-at-work\/companies-cutting-jobs-investments-shift-toward-ai-2026-07-06\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">free up capital for AI spending<\/span><\/a><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For recent Black and Hispanic college graduates, AI introduces another challenge &#8211; algorithmic discrimination. A study from Stanford University found that AI screening tools <\/span><a href=\"https:\/\/news.stanford.edu\/stories\/2026\/06\/ai-hiring-tools-racial-bias-research\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">systematically discriminate<\/span><\/a><span style=\"font-weight: 400;\"> against Black applicants. <\/span><a href=\"https:\/\/www.washington.edu\/news\/2024\/10\/31\/ai-bias-resume-screening-race-gender\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Research from the University of Washington <\/span><\/a><span style=\"font-weight: 400;\">has found that AI resume screening tools can show bias based on an applicant&#8217;s name. The tools they reviewed recommended applicants with White-associated names 85% of the time compared to only 9% for applicants with Black-associated names.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">When an AI underwriting algorithm is primarily trained on data from a pool of mostly White applicants, it can favor white candidates to the detriment of Black and Hispanic qualified applicants. A dataset of interactions between <\/span><a href=\"https:\/\/ncrc.org\/recent-research-shed-light-on-minority-discouragement-in-bank-small-business-lending\/\"><span style=\"font-weight: 400;\">biased bank branch loan officers and applicants<\/span><\/a><span style=\"font-weight: 400;\"> seeking a small business loan might produce an algorithm that reflects biases of the loan officers. Thus, AI can amplify existing systems of discrimination.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The labor market for recent college graduates is weak not only because of structural reasons like high costs and post-pandemic over-hiring but because of the AI shock. Declining entry-level job hiring is fueled by this dynamic. For non-White college graduates, potential discrimination from AI algorithms, in addition to the AI-related job hiring freezes, is directly affecting their ability to enter the workforce. The labor market is bad for recent college graduates. For Black and Hispanic grads, it\u2019s even worse.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><em>Joseph Dean is the<\/em>\u00a0<em>Racial Economic Research Specialist with NCRC\u2019s Research team.<\/em><\/p>\n<p><em>Photo credit: <a href=\"https:\/\/www.pexels.com\/photo\/man-wearing-an-academic-dress-15490423\/\" target=\"_blank\" rel=\"noopener\">Safari Consoler via Pexels.<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>According to the Bureau of Labor Statistics\u2019 (BLS) June jobs report, the national economy added 57,000 jobs, while the unemployment rate dropped slightly to 4.2%. The former was substantially below economists\u2019 expectations of 115,000 jobs. Monthly job gains have trended downward since March, going from 214,000 to 57,000.\u00a0 The drop in the unemployment rate was [&hellip;]<\/p>\n","protected":false},"author":4019,"featured_media":290469,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_angie_page":false,"content-type":"","_uag_custom_page_level_css":"","_monsterinsights_skip_tracking":false,"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"default","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"set","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center 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Dean","author_link":""},"uagb_comment_info":0,"uagb_excerpt":"According to the Bureau of Labor Statistics\u2019 (BLS) June jobs report, the national economy added 57,000 jobs, while the unemployment rate dropped slightly to 4.2%. The former was substantially below economists\u2019 expectations of 115,000 jobs. Monthly job gains have trended downward since March, going from 214,000 to 57,000.\u00a0 The drop in the unemployment rate was&hellip;","_links":{"self":[{"href":"https:\/\/ncrc.org\/wp-json\/wp\/v2\/posts\/290468","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ncrc.org\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ncrc.org\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ncrc.org\/wp-json\/wp\/v2\/users\/4019"}],"replies":[{"embeddable":true,"href":"https:\/\/ncrc.org\/wp-json\/wp\/v2\/comments?post=290468"}],"version-history":[{"count":3,"href":"https:\/\/ncrc.org\/wp-json\/wp\/v2\/posts\/290468\/revisions"}],"predecessor-version":[{"id":290476,"href":"https:\/\/ncrc.org\/wp-json\/wp\/v2\/posts\/290468\/revisions\/290476"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ncrc.org\/wp-json\/wp\/v2\/media\/290469"}],"wp:attachment":[{"href":"https:\/\/ncrc.org\/wp-json\/wp\/v2\/media?parent=290468"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ncrc.org\/wp-json\/wp\/v2\/categories?post=290468"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ncrc.org\/wp-json\/wp\/v2\/tags?post=290468"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}