The Federal Reserve Bank of New York publishes the most direct US gauge of how new college graduates are doing: for the second quarter of 2026 it reports an unemployment rate of about 5.6 percent for graduates aged 22 to 27, and an underemployment rate of 42 percent. The bank describes the unemployment figure as elevated, and its page does not tie either number to artificial intelligence. The series shows a weak entry-level market for degree holders. It cannot show whether AI is the reason.
Key takeaways
- The New York Fed defines early-career graduates as ages 22 to 27 and refreshes its college labor market page every quarter.
- For the second quarter of 2026 the page gives unemployment of about 5.6 percent and underemployment of 42 percent.
- Underemployment counts graduates in jobs that typically do not require a bachelor's degree, so it can stay high even when few graduates are jobless.
- In the text reviewed, the page offers no AI attribution and no comparison with all workers.
- Payroll research from Stanford and Canadian data add context, but they cover different groups and periods.
What the New York Fed series tracks
The bank's college labor market page follows early-career graduates, defined as ages 22 to 27. It is a regularly updated indicator rather than a one-off study, and the most recent quarter reviewed for this article is the second quarter of 2026. Two headline measures appear for that quarter: an unemployment rate of about 5.6 percent, which the page labels elevated, and an underemployment rate of 42 percent.
An unemployment rate counts people who want work and are looking for it. Underemployment asks a different question: among graduates who hold jobs, how many work in positions that typically do not need a bachelor's degree. A graduate can therefore be employed and still be counted in the 42 percent.
Two numbers, two questions
| Measure | What it counts | Second quarter 2026 | What it cannot tell a reader |
|---|---|---|---|
| Unemployment rate | Graduates aged 22 to 27 without work who are seeking it | About 5.6 percent, labeled elevated | Why those graduates are out of work |
| Underemployment rate | Graduates in jobs that typically do not require a bachelor's degree | 42 percent | Whether the job is temporary, a stepping stone, or a lasting mismatch |
The two rates can move apart. A tight market for degree holders would show up as higher unemployment, while a market that absorbs graduates into lower-skill roles would show up as higher underemployment. Reading both together gives a fuller picture than either alone.
What the series cannot say about AI
The page does not state a cause for either figure. In the text reviewed, it also does not set the graduate rates beside the rate for all workers, which is the comparison needed to judge whether young degree holders are doing worse than everyone else. A single quarter reflects the economic cycle, interest rates, and hiring budgets along with any change in how employers use software. For these reasons, the figures are best treated as context for the AI debate and not as an AI measure.
Three further limits apply. The age band of 22 to 27 mixes people at very different points in their careers. The series says nothing about which occupations graduates enter. And a quarterly figure can be revised or can shift when the next release arrives.
Where other studies fit
A Stanford Digital Economy Lab payroll study, revised August 12, 2026, reports a hiring gap for workers aged 22 to 25 in AI-exposed occupations and calls it descriptive. Its authors find no economy-wide displacement. Canadian federal analysts, in a January 28, 2026 article, reported weaker employment growth for younger workers through December 2025, with differences by exposure not statistically significant.
Questions to ask of a graduate-market headline
- Does the number describe graduates only, or all young workers?
- Is it unemployment, underemployment, or a hiring measure?
- Does the source name AI as a cause, or is the link inferred by the writer?
- Is the comparison group all workers, or no group at all?
This article summarizes published statistics and is general information. It is not career or financial advice, and decisions about education or employment belong with the individual and a qualified adviser.
FAQ
What is the unemployment rate for recent college graduates?
The New York Fed reports about 5.6 percent for graduates aged 22 to 27 in the second quarter of 2026 and describes it as elevated.
What does underemployment mean in this series?
It is the share of graduates working in jobs that typically do not require a bachelor's degree. The figure for the second quarter of 2026 is 42 percent.
Does the New York Fed blame AI for these figures?
The page reviewed does not attribute either figure to AI or to any other single cause, so the series alone cannot answer that question.
How often does the page change?
It updates quarterly, so the second quarter of 2026 figures will be replaced by later data.
Related reading
- AI jobs in US and Canadian labor data
- Whether AI could replace most jobs
- AI replacing workers and job loss
- AI and employment concerns
More in AI and Society.
Last verified: October 2026
Sources
- Brynjolfsson E, Chandar B, Chen R, Canaries in the Coal Mine? Six Facts about the Recent Employment Effects of Artificial Intelligence, Stanford Digital Economy Lab, revised August 12, 2026
- The Labor Market for Recent College Graduates, Federal Reserve Bank of New York, 2026 second quarter
- Mehdi T, Frenette M, Canadian employment trends in the era of generative artificial intelligence: Early evidence, Economic and Social Reports, Statistics Canada, January 28, 2026