The job market is getting weaker

Restaurants were among the bright spots in a weak jobs report. | Photo: Shutterstock.

Restaurants and bars added 11,000 jobs in August, according to new data on Friday from the U.S. Bureau of Labor Statistics, continuing the industry’s steady, if tepid, rate of employment growth this year. 

The bigger story may be the broader economy. The overall economy added 22,000 jobs—well under economists’ expectations—and the unemployment rate increased to 4.3%, adding to mounting evidence of an increasingly struggling jobs market. 

Several industries shed jobs, notably the government, which cut 16,000 workers. Professional and business services (down 17,000 jobs), wholesale trade (down 11,700 jobs), manufacturing (down 12,000) and construction (down 7,000) were among the industries that lost the most jobs.

Retail trade gained 10,000 workers. Food and beverage stores in particular gained 4,200 jobs. And leisure and hospitality industries, including restaurants, added 28,000 jobs. Hotels added 2,200 jobs. 

Health care alone added 30,600 jobs. Without places like doctors’ offices, nursing homes and hospitals the economy would have lost jobs.

Wage growth over the past year rose 3.7%, slowing from an increase of 3.9% the previous month.

The weakening labor market will likely put pressure on the U.S. Federal Reserve to cut interest rates, and perhaps more aggressively than it had previously signaled. Lower interest rates would lower the cost of debt and make it easier for operators to fund remodels or expansion.

Yet a weakening job market could intensify a need to keep prices low and focus on value, as a growing number of consumers are cutting back on their dining. Restaurants typically rely on a public that has jobs and incomes.  

Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.