BALTIMORE — The unemployment rate among Americans with college degrees was just 2.3 percent in November, a number that suggests employers are now competing for well-educated workers. Janet L. Yellen, the Federal Reserve chairwoman, went to the University of Baltimore on Wednesday to congratulate graduates on joining that fortunate group.
“After years of a slow economic recovery, you are entering the strongest job market in nearly a decade,” said Ms. Yellen, the keynote speaker at the university’s midyear commencement.
Better yet, she told the graduates, “economists are not certain about many things, but we are quite certain that a college diploma or an advanced degree is a key to economic success.”
Ms. Yellen’s speech did not touch directly on the Fed’s policy plans, but it did underscore the Fed’s increased satisfaction with progress of an economic expansion that is in its eighth year — and has been especially generous to the well-educated.
Last year, workers with degrees earned on average 70 percent more than those without. The gap was only 20 percent in 1980, and Ms. Yellen said, “Beyond these advantages, research also shows that a college or graduate degree typically leads to a happier, healthier and longer life.”
The basic explanation is that less-educated workers are being replaced by machines and by less-expensive workers in other countries. Workers with college degrees are more valuable, more difficult to replace — and increasingly, they are the ones who operate the machines.
“It concerns me, as it should concern all of us, that many are falling behind,” Ms. Yellen said in the more sober section of her prepared remarks. “For those who do not attend college, we must find other ways to extend economic opportunity to everyone in America.”
The overall unemployment rate fell to 4.6 percent in November, and other measures of the health of the labor market continue to improve. Importantly, there are signs of increased wage growth — including for younger workers, Ms. Yellen said, in keeping with the day’s theme.
The Fed on Monday published a survey showing that 61 percent of young adults reported that they were optimistic about their job opportunities in 2015, compared with 45 percent in 2013. And those who begin their careers in a strong job market generally earn more over their lifetimes, while people who begin during economic downturns, on average, never fully recover.
The Fed cited the health of the job market in its decision to raise its benchmark interest rate last week for the first time since the previous December. The Fed is still holding rates at a low level by historical standards, supporting economic growth by encouraging borrowing and risk-taking, but it is gradually reducing those incentives because the economy continues to gain strength.
Fed officials predicted last week they might raise rates three times in the coming year.
For all of the Fed’s efforts, growth remains lackluster, and Ms. Yellen acknowledged things could be better. “Challenges do remain,” she said. “The economy is growing more slowly than in past recoveries, and productivity growth, which is a major influence on wages, has been disappointing.”
Ms. Yellen fortified her own credentials on Monday by accepting an honorary degree from the university.