Restaurant hiring declines in October

Eating and drinking places lost about 7,500 jobs in October, according to the federal government, with hiring across all industries decelerating significantly. But the unemployment rate remained at 3.9%.
Restaurant and bar employment declined last month. | Photo: Shutterstock

Restaurants and bars cut their payrolls by 7,500 jobs in October, snapping a climb that had brought employment in the sector nearly back to pre-pandemic levels, according to new government data.

Across all non-agricultural industries, the U.S. Bureau of Labor Statistics (BLS) reported Friday morning, employers added 150,000 jobs, holding the national unemployment rate at 3.9%.

The federal agency noted that the October figures signaled a slowdown in hiring overall. The economy had generated an average of 258,000 new jobs in each of the prior 12 months, BLS said.

It noted that the overall hiring figure for October reflected a steep drop-off in manufacturing employment, a result of strikes against the Big Three auto makers.  

BLS did not provide a reason for decline last month in hiring by eating and drinking places. Its figures were released amid a flurry of third-quarter earnings reports that showed the restaurant business was still challenged by declining traffic, with sales gains coming largely from higher menu prices.

Restaurants and bars finished the month with total employment of 12,324,800 workers, or roughly 41,000 more than were on the sector’s payrolls a year ago.  

Hotels, in contrast to restaurants and bars, added about 6,700 jobs.

The drop in hiring left restaurants about 14,000 jobs below the segment's workforce tally for Feb. 2020, or before COVID-19 hit, according to Bruce Grindy, chief economist for the National Restaurant Association. That's a decline of 0.1%, he reported in an analysis of the BLS data. 

The industry had breathed a sigh of relief when the BLS reported a month ago that restaurants had finally re-hired enough employees to bring their collective workforce back to the early 2020 levels, a struggle that took three years, or considerably longer than the employment bounce back for other trades.

Grindy noted that the industry had not really hit the threshold. Rather, BLS' revision of its employment figures for August and September showed the preliminary measures of hiring by eating and drinking places were off by about 21,000. 

In short, the industry has yet to hit the milestone of employing as many people currently as it did in Feb. 2020.

Update: This story has been updated to include analysis from the National Restaurant Association.



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