A World Cup jobs boom in the US has failed to materialise, with employment in restaurants, bars and hotels falling by 61,000 in June, the Bureau of Labor Statistics (BLS) said on Thursday.
Analysts had expected the tournament, being hosted jointly by the US, Canada and Mexico, to lead to an increase in leisure and hospitality jobs. A report by Goldman Sachs analysts had forecast June’s figures would show the competition boosting employment by around 40,000 jobs.
“US hospitality jobs fell by 61,000 in June, defying World Cup boom expectations, while overall employment rose 57,000.”
But the growth went into reverse in June, despite reports of travelling football fans drinking bars across the US dry.
James Knightley, ING's chief US economist, called leisure and hospitality a “real area of weakness” in Thursday's figures. He told the BBC the decline was “a major surprise given the World Cup is on and bars and venues are busy”, adding: “Admittedly, this sector had seen a 44,000 jump in May, but even so that is a surprising outcome.”
Overall employment in the US rose by 57,000 in June, lower than expected, while the unemployment rate dipped slightly to 4.2%. The BLS’s previous release had reported early signs of a jobs boom in May, with bars and restaurants ramping up hiring to prepare for the World Cup.
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.