World Cup boom falters as US hospitality jobs fall in June
The anticipation of a World Cup jobs boom in the US has been met with disappointment as employment in restaurants, bars, and hotels actually saw a decline in June. Analysts had predicted that the tournament, jointly hosted by the US, Canada, and Mexico, would lead to an increase in leisure and hospitality jobs. However, according to the Bureau of Labor Statistics (BLS), the sector experienced a decrease of 61,000 jobs last month.
Despite initial reports of a hiring surge in May as bars and restaurants geared up for the World Cup, the reality in June was quite different. Even though football fans were flocking to bars across the country, the expected growth did not materialize. ING’s chief US economist, James Knightley, described the decline in leisure and hospitality jobs as a “major surprise” considering the busy atmosphere surrounding the World Cup.
The overall employment in the US did see a slight increase of 57,000 in June, lower than expected, while the unemployment rate dipped to 4.2%. However, there were significant downward revisions to job increases reported in previous months, with April and May numbers being 74,000 lower than initially thought. This unexpected trend has led experts to believe that the recent uptick in job growth may not signify a new trend.
Knightley also mentioned that these figures make an interest rate hike less likely in the near future. Susannah Streeter, chief investment strategist at Wealth Club, sees this slowdown in job growth as potentially creating a “Goldilocks scenario” for the US economy – not too hot, not too cold. Expectations of multiple rate hikes are fading, with only one hike fully priced in and not expected until next year.
In conclusion, the World Cup jobs boom that was anticipated in the US did not materialize as expected. The unexpected decline in leisure and hospitality jobs, along with downward revisions to previous job growth numbers, suggest a more cautious outlook for the economy. This could lead to a more moderate approach to interest rate hikes in the coming months, creating a sense of balance for the US economy.
