Latest / Stagflation Conversations with Fexingo: High Inflation, Slow Growth, and 1970s Echoes / How Stagflation Is Reshaping the Job Market for Recent Graduates
Transcript
- Lucas: Luna, I want to talk about the Class of 2026. They're graduating into a labor market that looks decent on paper but feels awful on the ground. Luna: Yeah, I've seen the headlines about Nevada being the place to find a job. But for most new grads, it's not that simple. Lucas: Exactly. So here's the picture. The May CPI came in at 334, up from 332.41. That's still running hot. Real GDP growth annualized is just 1.6 percent. So we've got high inflation, slow growth—textbook stagflation. And the labor market is caught in the middle. Luna: And yet the unemployment rate is 4.3 percent. That's low by historical standards. So what's the disconnect? Lucas: The disconnect is in the types of jobs available. Job openings per the JOLTS report actually rose to 7.618 million in April, up from 6.887 million. But a huge chunk of those openings are in industries that aren't entry-level friendly. Think healthcare, construction, transportation. White-collar office jobs? They're tightening up. Luna: So the 2026 grad who studied marketing or finance is seeing fewer postings that match their degree. Meanwhile, a welder or a truck driver is getting calls back. Lucas: Exactly. And average hourly earnings are up to $37.50, which is a 3.5 percent year-over-year gain. But with CPI still around 3 percent, real wage growth is barely positive. For an entry-level hire who's taking a job below their qualification level, it's a squeeze. Luna: And they've got student loans coming due. It's a rough combo. So what's the play for a new grad in this environment? Lucas: A few things. First, the Nevada story is real. That state is adding jobs in logistics, renewable energy, and hospitality. The CNBC piece highlighted that as a bright spot. If you're willing to relocate, that's a signal. Luna: But not everyone can pick up and move. What about remote work? Has that held up in this environment? Lucas: Remote roles for entry-level have actually shrunk. Companies are pulling people back, and they're less willing to train someone they've never met in person. So graduates are facing more competition for fewer remote slots. Luna: That's tough. And with initial jobless claims at 226,000, down slightly, it's not like layoffs are soaring. But the mix is different. Lucas: Right. The economy added nonfarm payrolls, but many of those jobs are in lower-wage services or require specific technical skills. A lot of graduates end up underemployed—working a job that doesn't require a degree. That erodes their earnings trajectory for years. Luna: So what's the advice? If you're a senior or recent grad listening, what should you do? Lucas: I'd say three things. One: be flexible on location and role. Two: network aggressively—most jobs aren't posted publicly. And three: consider upskilling in a high-demand area like data analysis, even if it adds a few months of training. Luna: That makes sense. And maybe consider industries that are more recession-resistant. Healthcare, education, government. Lucas: Absolutely. The government sector is hiring, and it's less cyclical. But the pay is lower. Trade-off. Luna: You know, Lucas, I have to say—if navigating this economy with us has made something click for you, we do have a way to support the show that keeps it ad-free. It's buy me a coffee dot com slash fexingo. Just a small gesture if today's episode was worth a coffee to you. Lucas: Yeah, it's a low-key way to keep us independent. No pressure. Back to the job market—one more data point: the real GDP growth rate ticked up to 1.6 percent from 0.5 percent last quarter. That's actually a pickup. But 1.6 percent isn't enough to absorb all the new grads quickly. Luna: So we're stuck in this high-inflation, low-growth groove. And the labor market is reflecting that. For the Class of 2026, patience and adaptability are key. Lucas: Exactly. And the data shows that those who can wait six months to a year for the right opportunity often come out ahead. But that's easier said than done when rent is due. Luna: Absolutely. We'll keep tracking these numbers. Thanks for listening.