US Hospitality Jobs Decline Despite World Cup Boost Expectations
WASHINGTON – Employment in the United States’ hospitality sector fell unexpectedly in June, defying forecasts that the ongoing FIFA World Cup would drive hiring across restaurants, bars and hotels.
New figures released on Thursday by the Bureau of Labor Statistics (BLS) showed that the leisure and hospitality industry lost 61,000 jobs during the month, despite expectations that the tournament – co-hosted by the United States, Canada and Mexico – would increase demand for workers.
Across the broader economy, the US added 57,000 jobs in June, below analysts’ expectations, while the unemployment rate edged down slightly to 4.2%.
The latest figures contrast with May’s employment report, which indicated that restaurants and bars had stepped up recruitment in anticipation of increased customer traffic during the World Cup.
Analysts at Goldman Sachs had projected that the tournament would contribute roughly 40,000 additional jobs in June. However, the anticipated hiring surge failed to materialise even as football fans flocked to venues across the country.
Commenting on the report, ING Chief US Economist James Knightley described the leisure and hospitality sector as a major weak point in the latest employment data.
“A real area of weakness.”
He added that the decline came as a surprise given the World Cup’s impact on businesses.
“A major surprise given the World Cup is on and bars and venues are busy.”
Knightley noted that the sector had recorded a gain of 44,000 jobs in May, making June’s sharp decline even more unexpected.
The BLS also revised employment figures for previous months, reporting that job growth in April and May was 74,000 lower than initially estimated.
According to Knightley, the weaker June report and downward revisions suggest that the recent improvement in hiring may not represent the beginning of a sustained recovery.
“The decent uptick in jobs over the previous three months is not necessarily the start of a new trend.”
He added that the softer labour market data could reduce the likelihood of another US interest rate increase later this month.
Susannah Streeter, Chief Investment Strategist at Wealth Club, said the slowdown in hiring could create a more balanced outlook for the US economy.
“Expectations of multiple rate hikes are fading away, with only one hike now fully priced in, and not until next year.”
She described the latest economic conditions as a potential “Goldilocks scenario,” where growth remains steady without the economy becoming either overheated or slipping into a sharp slowdown.
