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Employment data released by the Bureau of Labor Statistics is a positive for the restaurant industry.  The third consecutive month of disappointing employment growth in Leisure & Hospitality merits caution over the longer term, however.

Employment by Age


Employment growth among the 20-24 YOA age cohort, which is important for the QSR industry, was robust in May.  Employment growth among the other age cohorts was also strong, which is broadly encouraging for the industry.  The 20-24 YOA group was the only one shown in the chart below that saw a (marginal) sequential deceleration in employment growth.

EMPLOYMENT DATA: NEAR-TERM POSITIVE FOR RESTAURANT STOCKS - Employment by Age

 

Industry Hiring

As implied by the Leisure & Hospitality employment data, which leads the narrower food service data by one month, employment growth in the limited- and full-service food industries continued to decelerate in May.  On a sequential basis, the Leisure & Hospitality employment data registered a month-over-month gain of 13k, following two months of sequential job losses in the sector.  Looking at the second chart, below, it is clear that hiring in the Leisure & Hospitality industry has slowed over the last three months.  A continuation of this trend will be a negative sign for intermediate- and long-term demand.

EMPLOYMENT DATA: NEAR-TERM POSITIVE FOR RESTAURANT STOCKS - restaurant employment

 

EMPLOYMENT DATA: NEAR-TERM POSITIVE FOR RESTAURANT STOCKS - leisure   hospitality

Howard Penney

Managing Director

Rory Green

Analyst