Restaurants Retaining Workers Helps Fuel Blowout US Jobs Report


On the surface, the latest US jobs data suggest restaurants and bars are hiring at a blowout pace. But in reality, they’re probably just thinking twice about layoffs.

Leisure and hospitality payrolls rose 96,000 in September, double the pace of the prior month, according to a report from the Bureau of Labor Statistics. That in part reflected the addition of nearly 61,000 payrolls at restaurants and bars, where headcount has finally rebounded to pre-pandemic levels.

Payrolls at Restaurants and Bars Jumped Last Month

Headcount grew nearly 61,000 in September, four times the August pace

Source: Bureau of Labor Statistics

The jobs report measures how many employees are on payrolls in a given month, meaning more hiring as well as fewer job losses can play a role. So while part of the pickup likely stems from the broader fact that leisure and hospitality payrolls still haven’t recovered to early 2020 levels — something most other sectors did months ago — some businesses may have also chosen to let go of fewer people than normal at the end of the summer season.

“In a tight labor market where firms have struggled for two years to staff up and were just not able to do it, it’s perfectly natural that when it comes time to cut back your operations, you’d be very hesitant to let people go,” said Stephen Stanley, chief US economist at Santander US Capital Markets. “If you would normally cut 10 employees, you might only cut eight.”

More generally, September payroll figures can be a tad quirky, given the need for the BLS to adjust for end-of-summer layoffs in the leisure and hospitality sector as well as a surge in hiring related to the start of the new school year. As usual, employment in accommodation and food services technically declined in September with the end of the summer tourist season.

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