World Cup boom falters as US hospitality jobs fall in June
A World Cup jobs boom in the US has failed to materialise, with employment in restaurants, bars and hotels falling in June. Analysts had expected
A World Cup jobs boom in the US has failed to materialise, with employment in restaurants, bars and hotels falling in June. Analysts had expected the tournament, being hosted jointly by the US, Canada and Mexico, to lead to an increase in leisure and hospitality jobs. But the sector saw a decline of 61,000 jobs last month, the Bureau of Labor Statistics (BLS) said on Thursday. Overall employment in the US rose by 57,000 in June, which was lower than expected, while the unemployment rate dipped slightly to 4.2%.
The BLS's previous release reported early signs of a jobs boom in May, with bars and restaurants ramping up hiring to prepare for the World Cup. And a report by Goldman Sachs analysts expected June's figures to show the competition boosting employment by around 40,000 jobs. But, despite reports of travelling football fans drinking bars across the US dry, the growth went into reverse in June. ING's chief US economist James Knightley said leisure and hospitality was a "real area of weakness" in Thursday's figures. He added that the decline was "a major surprise given the World Cup is on and bars and venues are busy".
"Admittedly, this sector had seen a 44,000 jump in May, but even so that is a surprising outcome," he told the BBC. Thursday's jobs report included significant downward revisions to increases reported in previous months, with the number of jobs created in April and May now 74,000 lower than the BLS thought. Knightley said June's lower-than-expected overall increase, combined with the downward revisions, suggest "the decent uptick in jobs over the previous three months is not necessarily the start of a new trend". He added the figures make an interest rate hike later this month less likely.
Susannah Streeter, chief investment strategist at Wealth Club, said the slowdown in jobs growth opens the door to a "Goldilocks scenario" for the US economy, in which it could stay "not too hot, but not too cold". "Expectations of multiple rate hikes are fading away, with only one hike now fully priced in, and not until next year," she added.
The BriefWire