Monthly employment figures by the Bureau of Labor Statistics, released last week after a delay due to a government shutdown, showed that the U.S. economy added 119,000 jobs in September, an unexpected rebound for the labor market, according to CNN.
But despite the gains, the overall unemployment rate edged up to 4.4%. Noticeably, more than 1.9 million with at least a bachelor’s degree were unemployed in September, making up a quarter of all jobless workers, a level never before reached in data going back to 1992, Bloomberg reported.
The unemployment rate for those with bachelor’s degrees rose to 2.8%, up 0.5 percentage points from a year earlier, while other education levels saw little or no increase. Younger, recent graduates have also been facing difficulties in securing employment.
The professional and technical services sector, which includes computer systems design, management and technical consulting, and scientific research and development, recorded a decline in headcount over the first nine months of the year.
Most of the nation’s job growth in September came from just two sectors: health care and social assistance, and leisure and hospitality. So far this year, they have added 690,000 positions while employment outside these sectors has dropped by roughly 6,000.
The latest figures arrive against a backdrop of massive layoffs at major U.S. companies, including Amazon, Target, and Starbucks. According to outplacement firm Challenger, Gray & Christmas, October saw the highest number of job-cut announcements in more than two decades, driven by plans to replace positions with AI.
In a note released following the September data, Michael Feroli, chief U.S. economist at JPMorgan Chase & Co., warned that rising unemployment among college graduates “should further fuel AI-related job loss fears.”
While a college degree has long been seen as a ticket to a well-paying job, that perception is shifting as recent graduates face one of the toughest job markets in a decade, with AI playing a role in the trend, CNBC reported.
While economic worries, persistent inflation, and weaker consumer spending have contributed to fewer entry-level opportunities for graduates, some large employers have said they are replacing these positions with AI in order to streamline operations and cut costs.
“For the first time in modern history, a bachelor’s degree is no longer a reliable path to professional employment,” said Gad Levanon, chief economist at the Burning Glass Institute.
A June-July 2025 poll of 971 recent graduates across the U.S. by education technology firm Cengage Group found that only 30% of the Class of 2025 had secured a full-time job in their field, while 41% of 2024 graduates reported the same.
Cory Stahle, senior economist at Indeed Hiring Lab, said these workers play a crucial role in the labor market, and their struggles could signal broader economic weakness.
“If these workers have a hard time getting into jobs now … that also impacts their earning capabilities,” he said. “You start to add these things together and it really can lead to further widening in income inequality.”
