Employment data released this morning by the Bureau of Labor Statistics was mixed for the restaurant industry. Employment by age indicated that employment growth data continue to bode favorably for the quick service sector.  Food service industry hiring growth, however, is showing signs of rolling over.  A second sequential monthly decline in Leisure & Hospitality jobs in May is an important takeaway.


Employment by Age


As the chart below shows, all of the age cohorts we track showed positive growth in employment during the month of May.  Additionally, with the exception of the 25-34 YOA cohort, all of the data points registered sequential acceleration in the rate of employment growth from April to May.  Continuing strength in employment growth for the 20-24 YOA cohort is a positive for QSR.  We have favored quick service over casual dining for some time and, while that view is becoming more consensus, we still have more confidence in our favorite QSR names like JACK and SBUX than we do in our favorite casual dining names with the negative economic headwinds more likely to impact the more discretionary side of the restaurant industry.





Industry Hiring


As implied by the Leisure & Hospitality employment data, which leads the specific food service data by one month, April saw year-over-year employment growth in the limited and full-service restaurant sectors slow sequentially.  The Leisure & Hospitality data for May implies flat-to-slightly up on a sequential basis for employment growth in the food service sector. However, May also saw the Leisure & Hospitality industry lose 9k jobs versus April.  This second successive month of job losses in the industry is a departure from the 20-40k job additions we saw from September through March.  In fact, this is the first time we have seen two consecutive months of job losses in Leisure & Hospitality since January 2010.







Howard Penney

Managing Director


Rory Green




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