Leisure and hospitality hiring slows after eye-popping growth
There's one sector where hiring moderation is clear: leisure and hospitality.
Why it matters: In 2022, the labor market was fueled by restaurants, bars, hotels and others in the sector staffing up at a furious pace, and offering big pay gains to pull in workers they let go during the pandemic.
- But the 2021-22 boom-time employment trends in the sector are now in the past: July is the fourth consecutive month that the sector has seen little change in employment.
By the numbers: In the final quarter of 2022, job gains averaged 81,000 each month. That's slowed to 19,000 in the second quarter of 2023. July's data shows the sector added 17,000 jobs.
- The result is a comedown from the eye-popping pace of wage growth. In July, average hourly earnings were up 5.6% over the previous 12 months. In July 2022, wages rose 9%.
Of note: The sector is still 352,000 jobs short of its pre-pandemic level.
The intrigue: Average hourly earnings does not account for compositional shifts in the labor force.
- A slowdown in hiring in lower-wage sectors like leisure and hospitality is likely impacting the overall wage snapshot provided by this measure — making wage growth look higher than it really is.