Restaurant industry employment was flat in March, according to new federal data, as weak sales and a tight labor market appear to have finally put a halt to relentless hiring over the past few years.
Data released by the Bureau of Labor Statistics on Friday showed that food services and drinking places employed 11,883,600 employees in March—the same number as in February.
Overall, the economy added 103,000 jobs in the month, a notable slowdown from the average of nearly 190,000 the past 12 months. The unemployment rate was unchanged at 4.1%.
Restaurants have been hiring at a breakneck pace in recent years, as the industry has added units and expanded. Over the past 10 years, the industry has added well over 2 million jobs, and the percent of the total workforce employed at a restaurant has jumped from 6.9% to 8%.
Even with March’s hiring halt, the industry has added more than 200,000 jobs over the past 12 months, according to federal data.
But all that hiring has had a downside, increasing competition for workers and driving up wages. Starting pay rates in many markets well above the minimum wage are common. At the same time, the minimum wage is rising in many markets. That, plus rising benefit costs, is driving up total labor rates.
And industry same-store sales have been weakening for the past two-plus years. Same-store sales fell 0.8% in February, according to the monthly Black Box Intelligence index. Total industry traffic has been slowing since October, meanwhile, and rose 2.2% in February, according to the Technomic Chain Restaurant Index.
Slowing sales and higher wages could be a factor in the hiring slowdown.
But wage growth appears to be slowing along with the slowdown in hiring. Wages in March rose 3.2%, which is still higher than the 2.4% growth for all nonsupervisory workers. But it’s lower than the 4.3% increase back in December.
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