Employment data was positive for quick service and mixed for casual dining.
The overall jobs picture this morning was mixed this morning as the unemployment rate ticked down 10 basis points with a sequentially flat labor force participation rate but Private Payrolls for October came in at 104k versus 125k consensus and 191k prior (revised from 137k). The revision was good news but, at the end of the day, this news still indicates – at best – that the economy is making very slow progress.
Employment by age shows a large uptick in employment in the 20-24 YOA bracket in October, indicating a sequential acceleration from September’s level. This is a positive for the QSR industry which sources a lot of its customers from younger age cohorts.
The second chart, below, is on a one month lag versus the chart above and shows employment growth in the full service and limited service industries. Hiring continues to be strong on a year-over-year basis but, on the margin, employment growth in limited service restaurants showed improvement during September while full-service restaurants hiring slowed sequentially in terms of year-over-year growth. We would need to see a continuation of this trend in October to gain more conviction of concern among restaurant operators.