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Restaurants keep adding jobs as unemployment falls to 49-year low

The industry added 25,000 jobs last month as the economy continues to expand.
Photograph by Jonathan Maze

Both the restaurant industry and the economy as a whole continued their run of nearly uninterrupted expansion in April.

Federal data released Friday shows the industry added 25,000 jobs last month as hiring appears to have accelerated despite rising labor costs and concerns about finding enough workers.

That level of hiring came as the overall economy continues its impressive, decadelong run of growth.

The economy added 263,000 jobs and the unemployment rate fell to 3.6%, a level it has not been at since 1969.

The continued growth in employment and the decline in the unemployment rate are pulling up wage rates for the broader economy. Average weekly earnings are up nearly 3% over the past year.

Restaurants have been adding jobs at higher-than-average rates for much of the past five years as the industry continued to add locations and find new types of service models to serve prepared food to consumers.

That expansion has continued more recently despite concerns about rising wage rates (average wages for leisure and hospitality workers are up 3.7% over the past year) and overall industry saturation.

Restaurants have added 317,700 jobs over the past year, and the industry now employs nearly 12.2 million people. The 2.7% increase in industry jobs is higher than the 1.7% increase for the broader economy, according to federal data.

The Habit Burger Grill this week, for instance, said that its wage rates increased more than 5% in the first quarter. The company expects that to continue.

“The tight labor market combined with government-mandated wage increases for hourly employees continues to put upward pressure on labor costs,” CFO Ira Fils said on the company’s first quarter earnings call Thursday, according to a transcript of the call provided by financial services firm Sentieo.

Shake Shack, meanwhile, said that it is seeing “double-digit increases” in hourly and salary compensation rates in its home market of New York City. Labor costs as a percent of sales increased 110 basis points in the quarter.

Still, a growing economy filled with people who are working and taking home larger paychecks appears to be fueling an environment conducive to overall industry growth.

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