The March jobs report showed a slight slowdown, with 236,000 positions added on the month, versus 311,000 added in February. However, the Bureau of Labor Statistics report slightly beat estimates as the unemployment rate remained steady at 3.5%.
The leisure and hospitality sector added 72,000 jobs in March, with food services and drinking places gaining 50,000 employees during the month. The sector continues to claw back job losses from the pandemic, and March marked the 27th consecutive month of employment gains in the restaurant industry, representing about 2.5 million jobs. Still, March’s job growth was much lower than the average monthly gain of 95,000 throughout the prior six months. Employment in the sector remains below its pre-pandemic level by 368,000, or 2.2%. By comparison, food and drinking places gained 70,000 jobs in February and about 99,000 jobs in January.
That said, the leisure and hospitality’s labor flow the past quarter has far outpaced previous months, indicating a shift in the workforce as other categories, like technology and retail, experience some losses. In December, for instance, eating and drinking places added just over 26,000 jobs, while the sector added 59,400 jobs in November and just over 36,000 in October.
New data from the National Restaurant Association shows that about 60% of restaurant operators are optimistic about the near-term because of higher sales, commodity relief and an easing labor pool.
“The restaurant industry’s growth remains on track, driven by resilient consumers and a healthy labor market,” Bruce Grindy, chief economist for the National Restaurant Association, said in a statement. “While the path forward won’t be without challenges, we expect the industry to continue on a positive trajectory in the months ahead.”
On wages, March showed that average hourly earnings rose by 0.3%, slightly ahead of February’s 0.2% increase. At an annual rate, wage growth slowed to 4.2% versus 4.6% in February.
According to the National Restaurant Association’s recently released State of the Industry report, 86% of restaurant operators say total labor costs were higher in 2022 than they were in 2019. Indeed, labor outlays were up 18.3% in that timeframe, so a restaurant with annual sales of $900,00 paid $297,000 on labor in 2019 and $351,351 in 2022. Overall, the National Restaurant Association projects and increase of 500,000 jobs in the industry this year. The industry is also projected to add an average of 150,000 per year with total staffing levels reaching 16.5 million by 2030, from the 15.5 million projected at the end of this year. This is compared to the 12.2 million workers at the end of 2020 from Covid-induced layoffs and furloughs.
Contact Alicia Kelso at [email protected]