The economy continued to add jobs in September as the unemployment rate fell to a 50-year low of 3.5%, according to federal data released Friday.
Employers added 136,000 jobs as the labor market remained somewhat healthy despite broader signs of an economic slowdown. The last time the unemployment rate was this low was 1969.
But the restaurant industry added just 1,500 jobs last month, bringing its total employment to 12.2 million, according to U.S. Labor Department data.
That continues a recent trend of slowed hiring. The industry has added an average of 13,300 jobs a month so far this year—considerably lower than its 21,500 monthly average from 2018 and its slowest rate of growth in the post-recession era.
But even that doesn’t reveal the full extent of the hiring slowdown. Nearly half of the 119,600 jobs the industry has created this year came in January.
Through April of this year, in fact, the industry added 104,100 employees.
Since then, restaurants have added 15,500 workers.
Hiring in any industry ebbs and flows from one stretch to another, but the hiring slowdown has sustained for five months now and comes as the industry appears to be hitting a stretch of slowing sales.
Restaurant sales this year are up 3.7% through August, according to federal retail sales data. But that would be the slowest rate of growth for the industry since 2010. Slowing sales could be keeping some expansion plans on hold while accelerating closures of local restaurants.
In addition, a rapid shift in sales to takeout and delivery could be leading more operators to slow hiring of waitstaff.
Rising labor costs thanks to competition for workers and higher minimum wages could be slowing hiring, especially in many markets such as San Francisco, where a local restaurant association has already said more restaurants closed last year than opened.
As for the broader economy, the new jobs didn’t lead to higher wages—wage growth slowed to 2.9% from 3.2% last month. And much of the hiring came in industries such as healthcare (41,400 more jobs), professional services (34,000 jobs) and state and local government (22,000 jobs).
Manufacturing jobs declined by 2,000 last month, while retail trade employment declined by 11,400 as retailers continued to close stores nationwide.
Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.