Decline in Restaurant Hiring Trend Observed in June

Decline in Restaurant Hiring Trend Observed in June

The latest report from the Bureau of Labor Statistics in June revealed a concerning trend for the restaurant industry. After a continuous growth streak spanning two and a half years, the sector experienced a decline of nearly 1,000 positions. This downturn is a significant development considering that June is typically the busy season for most restaurants.

Despite the setback, the overall U.S. labor market showed resilience, albeit at a slower pace compared to May. In June, a total of 209,000 jobs were added, down from the 306,000 recorded the previous month. Nevertheless, the unemployment rate remained stable at 3.6%, indicating a steady job market amidst ongoing macroeconomic challenges.

The leisure and hospitality sector, which includes restaurants and bars, experienced a relatively flat period for the third consecutive month, adding only 21,000 positions. However, this sector is still 2.2% below its pre-pandemic employment level, with a deficit of 369,000 positions. Specifically, the restaurant and bar segment declined by approximately 1,000 positions, representing a decrease of 0.8%. As a result, the industry is currently lacking around 80,000 jobs compared to February 2020 figures.

To provide additional context, in May, foodservices and drinking establishments saw an increase of 33,000 jobs, leaving the sector 2.1% below pre-pandemic employment levels. In April, 25,000 jobs were added, with employment still lagging by 2.4% compared to pre-pandemic levels.

What makes June's decline particularly interesting is that it occurred during the peak season for most restaurants. Typically, the industry experiences a surge in hiring during the summer months, with recruitment starting in April and peaking in June, July, and August, according to the National Restaurant Association. Traditionally, the restaurant sector is the second-largest creator of seasonal jobs during the summer, trailing only behind the construction industry.

However, the June report from the Bureau of Labor Statistics reveals that leisure and hospitality falls behind not only construction but also health care and government jobs in terms of employment gains. In May, the National Restaurant Association had projected the addition of 502,000 seasonal jobs for the industry during the summer, but the recent decline raises concerns about meeting this target.

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