Employment data that came out on Friday was mixed for the restaurant industry.
The level of employment among 20-24 year olds grew in July, which is a positive data point for the QSR industry, but the level of growth slowed on the margin to 1.4% from 1.5% the month prior.
Much of the positive sentiment from management teams during 2010 and the early part of 2011 was based upon improving job prospects for Americans. While payrolls did beat expectations on Friday, expectations are not high and the initial jobless claims trend suggests that the unemployment rate is going to remain elevated for the foreseeable future.
As the chart below shows, employment growth in the food service industry continues to be strong. The data lags the employment by age data by one month. Given the heightening concerns that have depressed business and consumer confidence (particularly expectations) of late, it will be interesting to see if the hiring data for July shows a slowing in hiring trends in the restaurant industry.
Howard Penney
Managing Director
Rory Green
Analyst
