TL;DR
After a job loss in June, the restaurant and bar sector regained over 13,000 jobs in July. This recovery, though not as strong as earlier this year, hints at a less competitive job market for hiring. Small retailers and restaurants can consider this trend while planning their staffing needs.
In July, the restaurant and bar sector saw a positive turnaround in employment after experiencing job losses in June for the first time in over two years. The sector added around 13,400 jobs, which is a slight improvement from the previous months of June and May.
However, it’s important to note that July’s job gains were not as high as the first quarter averages and were significantly lower compared to the increases seen in 2021 and 2022. From April to July, eating and drinking places added fewer than 11,000 positions each month, whereas during the first quarter, the monthly average was 53,000 jobs. The years 2021 and 2022 witnessed an addition of 97,500 jobs each month.
Although the restaurant workforce is gradually recovering, it remains below the levels seen before the pandemic by approximately 64,000 jobs, making up about 0.5% of the total.
According to Bruce Grindy, Chief Economist at the National Restaurant Association, restaurant operators aiming to increase staffing might encounter a less competitive job market in the upcoming months. While the industry saw some job growth in July, it was still lower compared to the gains earlier in the year.
The leisure and hospitality sector, in general, added 17,000 jobs in July, a significant drop from the average monthly gains of 67,000 in the first quarter. Although the economy added 187,000 jobs in total in July, the slow job growth in June and July highlights a cooling labor market.
On the wage side, average hourly earnings for employees in various sectors rose by 0.4% in July. Over the last year, average hourly earnings have grown by 4.4%, outpacing inflation. This trend might explain why consumers are showing resilience amid economic uncertainties.
For small retailers and restaurant owners, understanding these insights is crucial. While hiring might be slightly easier due to less competition in the job market, businesses should be aware of wage inflation and its impact on their margins. Considering the moderating trend in labor inflation predicted towards the end of the year can guide businesses in making informed decisions about staffing and operational expenses.
