A World Cup jobs boom in the United States has failed to materialise, with employment in restaurants, bars and hotels falling by 61,000 in June, according to the Bureau of Labor Statistics (BLS).
Analysts had widely expected the tournament – being hosted jointly by the US, Canada and Mexico – to drive an increase in leisure and hospitality jobs. Goldman Sachs had forecast a boost of around 40,000 jobs for June. Instead, the sector went into reverse, even as reports emerged of travelling football fans drinking bars across the US dry.
“US hospitality jobs fell by 61,000 in June, defying expectations of a World Cup boost, as overall employment rose less than expected.”
The decline came as a shock to economists. “It is a major surprise given the World Cup is on and bars and venues are busy,” said James Knightley, chief US economist at ING. He described leisure and hospitality as “a real area of weakness” in Thursday’s figures. “Admittedly, this sector had seen a 44,000 jump in May, but even so that is a surprising outcome,” he told the BBC.
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 also made significant downward revisions to job increases reported in earlier months: the number of jobs created in April and May is now 74,000 lower than previously thought.
Knightley said the combination of the weaker-than-expected June figure and the downward revisions suggests “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 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 data marks a sharp reversal from May, when the BLS reported early signs of a World Cup jobs boom, with bars and restaurants ramping up hiring to prepare for the tournament. That optimism has now evaporated, leaving economists puzzling over why the expected boost failed to materialise.