Employment statistics released this morning by the Bureau of Labor Statistics were mixed from a restaurant industry perspective. The hiring data (released on a one month lag) indicates a growing divergence between full-service and limited-service employment growth in July. The employment by age chart shows a sequential deceleration in employment growth from July to August.
Employment by Age
Sequential Acceleration/Deceleration from July to August in employment growth:
20-24 YOA: DECELERATION
25-34 YOA: DECELERATION
35-44 YOA: ACCELERATION
45-54 YOA: ACCELERATION
55-64 YOA: FLAT
Takeaway: The deceleration in employment growth among younger cohorts may have slowed the growth in QSR same-restaurant sales during the month August.
The chart below shows that, as of July, full service restaurants continue to hire at a faster rate, versus last year, than limited service restaurants. The Leisure & Hospitality employment data is released in step with the major headline data and so it gives us an idea of how August might look. Given the close relationship between Leisure & Hospitality employment growth and full service employment growth, we would expect stabilization in that trend next month. If we do not see that stabilization in full service employment trends in August and, at the same time, we see that Leisure & Hospitality decelerated into September, that would not be a bullish indicator for 3Q casual dining same-restaurant sales trends.