The United States labor market has displayed remarkable resilience, with the number of employed individuals surpassing pre-pandemic levels from February 2020. This milestone was officially reached in August 2021. However, this headline-grabbing recovery in employment obscures underlying vulnerabilities of the labor market that persist within sectors that bore the brunt of the pandemic’s impact, particularly the hospitality sector, encompassing restaurants and hotels.
The latest data from the September jobs report sheds light on the fact that the accommodations industry, which includes hotels, remains the last significant holdout in the effort to fully restore the labor market to its pre-pandemic state. While the food services and drinking places industry managed to bounce back, adding 61,000 jobs in September, it has now reclaimed its February 2020 employment level, boasting 12,368,400 workers. In contrast, the accommodations industry remains 10.3 percent below its pre-pandemic employment levels.
During September, the accommodations industry added a modest 16,000 employees, bringing its total employment figure to 1,895,500. However, in February 2020, this industry boasted a more substantial workforce of 2,054,500 individuals. Astonishingly, this shortfall in accommodations employment accounts for the entire gap within the leisure and hospitality sector, the sole major industry monitored by the Bureau of Labor Statistics that has not yet managed to recover from the pandemic-induced losses.
As of September, leisure and hospitality employment found itself just 184,000 jobs short of February 2020 levels, with accommodation and food services, a sub-industry within leisure and hospitality, lacking 187,500 jobs to reach those levels. This discrepancy can be solely attributed to the continued weakness within the accommodations industry.
On a broader scale, the US labor market demonstrated robustness in September, adding a surprising 336,000 new jobs, nearly double the 170,000 initially forecasted by Wall Street experts. This development serves as the latest testament to the economy’s resilience, exceeding expectations set by many economists. According to Bank of America economist Stephen Juneau, “The labor market remains robust.” He also emphasized that hiring in “high-touch services sectors, including education and health, leisure and hospitality, and other services,” accounted for a substantial 55 percent of the job gains observed throughout the year. Juneau’s analysis highlights that sectors previously lagging behind in the labor market recovery are now rapidly hiring, further bolstering the economy.
The meticulous scrutiny of employment data by industry underscores the remarkable strength of this recovery, with fewer signs of residual pandemic-induced damage. While the overall rebound in the labor market provides an encouraging outlook for the American economy, it is important to acknowledge that certain industry sectors continue to grapple with the lingering effects of the crisis.
In conclusion, while the overall labor market displays robust recovery, it is evident that the hospitality sector continues to face challenges in catching up with other sectors. The US labor market’s steady progress toward pre-pandemic levels is indeed a promising development, characterized by declining unemployment rates and an influx of job opportunities. However, the persistence of underperformance within specific sectors reminds us that the recovery has been uneven, with the services industry suffering the most during the pandemic.
Source: Yahoo Finance