This past winter’s bleak job prospects are looking bright compared to recent projections for the coming spring and summer. Newly graduated college students will be among the hardest hit. A recent study conducted by the National Association of Colleges and Employers (NACE) predicting that employers will hire 22% fewer graduates from the class of 2009 than they did last year.

If that prediction comes to fruition, it would be the biggest downturn since 2002, when the terrorist attacks on 9/11 and the bursting of the dot-com bubble sent graduate hiring down 36%.

According to the Bureau of Labor Statistics (BLS), in December 2008 there were 1.413 million unemployed college graduates in the United States, a rate of 3.7%. The record high for graduate unemployment is 3.9% in January 1983.

The BLS has not released more recent information concerning graduate unemployment.

However, the unemployment rate for the population as a whole rose from 7.2% in December to 7.6% in January (a 16-year high). Half of all jobs lost since 2007, across nearly every major industry, have occurred in the past three months. According to the January 2009 Employment Situation Summary, prepared as part of the monthly Current Population Survey, the unemployment rate for teenagers has remained steady at 20.8%.

In spite of that steadiness, the situation may even be worse than the numbers seem to indicate.

In December, 282,000 degree-holders were laid off, but the number deemed unemployment by the Department of Labor rose by only 2,000. The government only considers people unemployed if they are out of a job but looking for work, and an increasing number of young adults are leaving the workforce by going back to school.

According to the NACE survey, 67% of employers have altered their hiring plans for the class of 2009, and most of those said they were hiring fewer graduates than they had planned (double the numbers from this time last year). Employers are increasingly uncertain, too: 46% said they were not sure if hiring would recover by fall.

Despite the dire projections, a NACE survey of 12,000 college students indicates that, while 63% are worried about the job market, as many as 53% are confident that they will be employed within three months of graduation.

It is tough to remain that optimistic as the economic recession deepens. Analysts from the BLS told the Washington Post that the graduate unemployment rate could rise past 4% this spring, which would be the highest number since they began tracking the data in 1970.

Anne VanderMey, a reporter for BusinessWeek, wrote the following about the crisis: “It’s about to get worse. A lot worse. And business graduates … well, you might as well be philosophy majors because you’re in for the worst of it.”

Our Take

If the United States is not careful, it could go down the same path as China. This year, some 6.1 million students are expected to graduate from institutions of higher education and enter the job market. The unemployment rate for degree-holders in China is already at 27%, and the economic recession has hit the country hard.

In 1999, China created a number of colleges and universities in order to breed more white-collar workers, leading to an oversupply of graduates in a heavily blue-collar economy. Only 6% of Chinese hold college degrees, compared to around 30% for the United States. However, job prospects for American degree-holders are increasingly bleak, even as college enrollment levels steadily rise.