Q2 proves to be tough for the restaurant job market

The U.S. economy added 206,000 jobs in June – a stronger than expected number – while the unemployment rate ticked up to 4.1%, from 4% in May and 3.9% in April. According to data released Friday morning from the Bureau of Labor Statistics, employment levels in the leisure and hospitality sector were somewhat stagnant month-over-month, with just 7,000 jobs added in June. This is compared to 42,000 positions added in May and a 12-month average of 35,000 positions added.

The picture for eating and drinking places was even less rosy, with a decline of -3,100 jobs in June driven by softening sales and traffic levels across segments. This followed a plus-11,200 jobs added in May. Restaurants added just 900 total jobs during the second quarter, according to the National Restaurant Association, representing the weakest quarterly performance since Q4 2020 amid Covid.

January 2024 remains the only other month since late 2022 in which the industry lost jobs (-21,100). Despite a slower hiring month in June, the industry is still on track to hit the 525,000 seasonal forecast issued by the National Restaurant Association. Additionally, the industry workforce remains above pre-pandemic levels by about 0.3% driven by a 3% increase at quick-service and fast casual concepts. Full-service restaurants, however, still have a long road to recovery, at -4% below February 2020 levels.

The association’s data shows that 20 states have fewer jobs in the sector than they did in May 2019, led by Maryland, North Dakota, and Louisiana. States that have gained the most employment in the eating and drinking sector include South Dakota, Nevada, and Utah ( 14% each), Montana ( 12%), and Texas ( 11%).

Overall, there were less than 800,000 job openings in the restaurants and accommodations sector, indicating that the labor market could be normalizing after three-plus years of volatility, and that there is less turnover happening.

Contact Alicia Kelso at [email protected]