Restaurant Job Growth Moderated in June

This article first appeared in Restaurant Hospitality.

The United States economy added about 147,000 jobs in June, exceeding expectations, while the unemployment rate dipped to 4.1% from 4.2%, according to federal data released Wednesday morning.

June marked the 54^th consecutive month of employment growth.

Eating and drinking establishments’ employment levels moderated, adding just 6,500 jobs last month, versus about 27,400 jobs added in total in April and May. The June moderation comes despite a busy seasonal push for jobs across the industry.

Simultaneously, average hourly earnings rose 0.3% for the third consecutive month, while wages are up 3.9% year-over-year.

The resilient unemployment rate and steady wage growth offer reason for optimism among restaurant operators who rely on consumers’ willingness to spend more.

According to the National Restaurant Association, the restaurant labor market has added about 72,000 jobs in the last four months, following losses in January and February, and is on pace to post growth this year. That said, the number of employees leaving their jobs has increased in recent months, as illustrated by the slowdown in net job growth.

“This morning’s jobs report showed another uptick in employment — across industries and within food services — underscoring continued strength in the labor market. That’s generally good news. When more people are working, restaurants typically see a lift in discretionary spending, especially on quick-service and casual dining,” said Restaurant365 general manager of inventory and purchasing Joe Hannon. “But for operators, there’s a tradeoff. Staffing remains competitive and rising wages continue to compress margins. We’re hearing from customers that turnover is still a major issue, and even fully staffed teams are stretched thin. Now’s the time to double down on retention strategies, whether that means optimizing schedules to reduce fatigue, automating repetitive tasks, or using performance data to spot burnout before it turns into churn. The more restaurants can streamline, the more bandwidth managers have to focus on culture and consistency.”

Read the full article at Restaurant Hospitality.