Photograph by alchemy/Adobe Stock
Most economists were expecting a rebound in jobs growth with the release of July labor data today, but the numbers released by the Department of Labor unexpectedly reveal that the U.S. market overall lost 23,000 jobs last month. Especially surprising was the reduction of 40,000 jobs in the leisure and hospitality sector, the second straight month with a decline of that magnitude.
It's especially curious given the tourism boost that was expected from summer travel, particularly with the allure of the FIFA World Cup matches and surrounding activities.
Economic forecasters had been expecting as many as 88,000 to 100,000 jobs to be added to the overall U.S. market in July. As for leisure and hospitality, there is some head-scratching happening as to why jobs weren't added.
"The one thing that I find is a little bit mysterious over the past couple months is leisure and hospitality," Dan North, senior economist at Allianz Trade North America, told the site Seeking Alpha in an interview previous to today's numbers being released. "I think something's wrong there. Something doesn't add up."
Other economists, according to Seeking Alpha and the Associated Press, expected the July report to see the perplexing trend reversed.
Restaurants fared worse than hotels
Restaurants and bars accounted for 26,100 cut jobs in July, a good chunk of the 40,000 lost in the leisure and hospitality sector. The lodging sector did not see a drop, but rather created a modest 2,600 jobs.
More than 16,000 jobs were eliminated in the arts, entertainment and recreation division of the leisure and hospitality sector. Surprisingly, some 6,300 of those cuts occurred in the sector that includes spectator sports and performing arts.
Planner satisfaction with hotel staffing and support has fluctuated over the last several months, according to Northstar/Cvent Meetings Industry PULSE Survey. Some of the post-Covid staffing concerns had seemingly been ameliorated; we'll note whether the perplexing data coming out this summer has any effect on perceived service levels.