The World Cup was supposed to be a hiring bonanza for American bars, restaurants and hotels – but instead, the sector lost 61,000 jobs in June, according to the Bureau of Labor Statistics. Analysts had expected the tournament, hosted jointly by the US, Canada and Mexico, to drive a surge in leisure and hospitality employment, especially after a 44,000 jump in May. But Thursday’s figures showed the growth went into reverse, despite reports of travelling football fans drinking bars across the country dry.
Overall US employment rose by 57,000 in June, lower than expected, while the unemployment rate dipped to 4.2%. Goldman Sachs had predicted the World Cup would boost employment by around 40,000. Instead, the sector’s decline prompted James Knightley, chief US economist at ING, to call it a “real area of weakness” and “a major surprise given the World Cup is on and bars and venues are busy”. He added: “Admittedly, this sector had seen a 44,000 jump in May, but even so that is a surprising outcome.”
“US hospitality jobs fell 61,000 in June despite World Cup, surprising analysts expecting a boom.”
The disappointment was compounded by significant downward revisions to previous months. April and May job numbers were slashed by 74,000, suggesting the earlier uptick was less robust than thought. Knightley said the lower-than-expected June increase combined with the revisions indicated “the decent uptick in jobs over the previous three months is not necessarily the start of a new trend”. He added that the figures make an interest rate hike later this month less likely.
Susannah Streeter, chief investment strategist at Wealth Club, said the slowdown opens the door to a “Goldilocks scenario” for the US economy – “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 said.