The U.S. economy added 114,000 jobs in July, much fewer than expected, while the unemployment rate jumped to 4.3%, from 4.1% in June, 4% in May, and 3.9% in April. July’s numbers marked the highest unemployment level since October 2021, when the rate was 4.5%.
The leisure and hospitality sector remained relatively steady month-over-month, according to the Bureau of Labor Statistics’ monthly report, released Friday morning. Eating and drinking places specifically were a bright spot from the report, adding a net 19,500 jobs on a seasonally-adjusted basis. This is compared to May’s numbers, which were about 16,500, and June, which was -3,100.
Despite a somewhat strong month, however, eating and drinking places have averaged just 7,200 new jobs each month throughout the past four months, according to the National Restaurant Association. During the previous 15 months, the industry gained nearly 23,000 jobs each month on average, indicating a sizeable slowdown from the pandemic recovery pace.
Still, the industry’s workforce is bigger than it was in February 2020 by about 64,000 jobs, while many openings remain. According to data from the BLS’ Job Openings and Labor Turnover Survey, there were about 866,000 job openings in the restaurants and accommodations sector. Though that’s a large number of roles to fill, it remains below the 2019 average of 875,000 and the record high 1.5 million-plus in 2021 and 2022.
Meanwhile, retention has significantly improved, with just 3.8% of employees in the sector quitting their jobs in June, marking the lowest monthly quit rate since May 2015.
Having a more robust labor pool in place has emerged as a major theme for restaurant chains that have performed well throughout the past couple of quarters, which have otherwise been tough for the industry at large. During Cheesecake Factory’s second quarter earnings call Wednesday, president David Gordon said his company’s more stable staffing and retention levels have increased efficiencies and productivity levels. Texas Roadhouse executives also repeatedly cited the company’s higher staffing and retention levels for its strong second quarter performance, in which same-store sales were up 9.3% year-over-year and traffic grew by 4.5%.
Contact Alicia Kelso at [email protected]
