US hospitality jobs surge 70,000 in May ahead of World Cup; overall payrolls rise 172,000
The US economy added 172,000 jobs in May, far exceeding the 105,000 expected, driven by a 70,000 surge in leisure and hospitality hiring ahead of the World Cup, the Bureau of Labor Statistics reported. Food and drink establishments alone contributed 48,000 of those positions. The unemployment rate held at 4.3%, while average hourly earnings rose 3.4% year-over-year, lagging inflation at 3.8%.
The US economy added 172,000 jobs in May, far exceeding the 105,000 increase economists had expected, the Bureau of Labor Statistics reported. The unemployment rate held at 4.3%.
Leisure and hospitality businesses created 70,000 jobs in May, a sharp acceleration from the average monthly increase of 14,000 for the prior year. Food and drink establishments alone contributed 48,000 of those positions, as pubs, bars and restaurants ramped up hiring ahead of the World Cup being jointly hosted by the US, Mexico and Canada.
Employment in local government rose by 55,000 jobs, while the healthcare sector added 35,000 positions. Financial services jobs fell by 22,000, and have declined by 105,000 from a peak last May. Jobs created in March and April were revised up by a combined 93,000, indicating hiring was even more resilient than initially reported.
Average hourly earnings rose 3.4% year-over-year, lagging US inflation, which is running at 3.8%. The rise in inflation has been driven largely by soaring energy prices caused by the US-Israel war in Iran, which has effectively closed the Strait of Hormuz shipping lane.
ING chief US economist James Knightley said: "The squeeze on household spending power is intensifying with real household disposable incomes having fallen for three consecutive months and consumer confidence remaining close to all-time lows." He added: "There is a long way to go before the end of the year, and we still lean in the direction of eventual rate cuts assuming a deal can be reached to reopen the Strait of Hormuz."
Concerns have been raised that while hiring is up ahead of the World Cup, a subsequent economic boost may not follow due to high prices facing fans. Hotels have warned of slow bookings, and US President Donald Trump said he "wouldn't pay it either" when asked about a $1,000 ticket price to watch the US play Paraguay. The attorney generals of New York and New Jersey launched an investigation into Fifa over allegations of "artificially inflating prices" and "misleading fans". Fifa declined to comment on the investigation.