Job growth has slowed throughout the economy in recent months as a jittery economy appears to be having its impact on employment, at least based on new federal data released on Friday.
Restaurant and bar employment was flat in July, down 300 jobs, according to the U.S. Bureau of Labor Statistics. The industry has added just 100 jobs over the past two months, continuing a period of year-long, tepid employment growth.
The overall economic picture is not much better. The economy added 73,000 jobs, under expectations, but prior months’ jobs estimates were revised downward significantly. May’s job growth was revised downward to 19,000 from 144,000, for instance. June’s was revised to 14,000 from 147,000, according to the Labor Department.
The unemployment rate increased slightly to 4.2%. The labor force participation rate, meanwhile, is down 0.5% over the past year, to 62.2%. In short, the economy is not adding many jobs and more people are getting discouraged and leaving the labor force.
The weak labor market, coupled with overall economic stagnation, appears to be increasing the likelihood that the U.S. Federal Reserve will lower interest rates when it next meets in September.
At the same time, the White House continues to push tariffs that could drive up the cost of goods and therefore increase prices. The Trump Administration announced a sweeping set of new tariffs this week.
Concern about tariffs and their potential to impact consumer prices has kept the Fed from lowering interest rates.
Restaurant job growth is traditionally tepid during the summer months, or at least it has been in recent years. But the industry’s overall employment numbers have been generally slow over the past two years, a likely sign of weak industry sales and traffic. Technology, which has become more prevalent inside restaurants, may also be holding back job growth.
Average monthly job growth has been flat so far this year. That average was 0.09% last year, 0.17% the year before and 0.42% in 2022.
Stocks were down in premarket trading on Friday.
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