Restaurants added 17,600 jobs in May, according to the latest federal data, as the industry’s rate of hiring has normalized after years of robust expansion.
Food services and drinking places increased their number of employees by 0.15% in May, according to data from the U.S. Bureau of Labor Statistics. That was the same rate as the overall economy, which added 223,000 jobs in May.
The unemployment rate fell slightly, to 3.8%.
The restaurant industry had been on a hiring spree, leading total employment growth for years as restaurateurs and chain concept operators expanded and added employees.
The industry has added at least 292,000 jobs annually since 2012, with the lowest number coming from 2017.
But restaurants have added just 216,200 jobs over the past year, suggesting that the industry is slowing its expansion, closing more units and keeping hiring in check.
One major factor in the potential slowdown in hiring is labor costs. Rising minimum wages in many states, and intense competition for labor, is driving up wages and could be keeping some operators from adding employees. There’s already concern that rising labor costs could slow acquisitions in the restaurant space.
Still, the hourly wage for leisure and hospitality workers is up just 3% over the past year. That’s only slightly better than the 2.7% increase in hourly wages for the broader economy.
And the overall unemployment rate, which is now at historic lows, could also be a disincentive as operators look to add units.
Restaurants have also been adding technology at a rapid clip in recent years, including kiosks, tablets and other back-of-house innovations, much of which is designed to make operations more efficient. But it’s not clear whether that’s having much of an impact on hiring.
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