Data released Friday morning from the U.S. Bureau of Labor Statistics shows that the restaurant industry’s workforce shrunk by 15,700 jobs in January, while the overall workforce added 143,000 jobs during the month. While job growth continues, it is moderating, and January’s numbers fell short of economists’ expectations. Still, the unemployment rate inched down to 4%, from 4.1% in December, marking an eight-month low.
The report follows December’s robust numbers in which the U.S. gained an upwardly revised 307,000 jobs. Eating and drinking places added a net 23,200 jobs in December, while the leisure and hospitality sector overall grew by nearly 46,000 positions.
In total, eating and drinking places added a net 148,000 jobs in the second half of 2024, according to the National Restaurant Association, marking an improvement from the net decline of 11,000 jobs during the first six months of the year. As of January, eating and drinking places were 72,000 jobs (or 0.6%) above their February 2020 employment peak.
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The quick-service, fast casual, and coffee and snack segments continue to outpace early 2020 levels. However, the full-service category remains below its pre-pandemic level by about 4.1%.
The National Restaurant Association’s State of the Industry report, released this week, shows that 77% of operators continue to be significantly challenged by recruitment and retention.
“Now is the time for most businesses to focus on keeping their best people, investing in training, and creating a workplace where employees want to stay. It’s not just about filling positions. It’s about building a team that’s primed and ready for whatever the future holds,” Restaurant365 general manager Joe Hannon said. “This is especially important within the restaurant industry, which saw a dip in hiring in January, and has a need to retain staff. Restaurant operators can build up and support their staff through cross-training and opportunities for career growth.”
There are silver linings despite January’s dip. Unfilled job openings are back to pre-pandemic levels and employee-initiated turnover is at its lowest point in nearly a decade, for instance. Further, more teens and young adults are entering the workforce and many — about 40% — choose to work at restaurants.
The report said that 78% of operators did not have enough employees to meet customer demand in 2021, while just 32% say the same now.
The association expects the industry to add about 200,000 jobs in 2025, which would bring the total number of restaurant and foodservice jobs to 15.9 million by the end of the year. Between 2025 and 2035, the industry is projected to add an average of 150,000 jobs a year, with total staffing levels reaching 17.4 million by 2035.
Contact Alicia Kelso at [email protected]
