For the job market to bounce back, restaurants, hotels and bars have to hire. More than a third of the jobs that still are missing from today's economy compared to February before the pandemic took hold are in the hospitality industry.
There were 3 million fewer of these jobs in July than a year earlier. And while these companies have been adding hundreds of thousands of positions over the past three months, the pace of round has slowed as the summer of COVID-19 wears on. The latest data for August employment is due out on Friday in the week ahead.
As companies work their way through their Paycheck Protection Program money and many communities continue limiting restaurant and bar operations, demand for workers will drop. It will be a drag on a sharp snap back in the job market. About a half million of these jobs were added last month, but three times as many were added in May and June. It is worth watching this trend in the August report.
These hospitality jobs are not high-pay positions. However, they help support millions of households, and often serve as entry points into the job market for young or unskilled workers.
For stock market investors, the hospitality sector is about half as large as a single tech company � Apple. As a group, restaurant and hotel stocks don't garner the market value that higher margin and more exciting businesses do. That helps explain why the slowdown in recovery for the hospitality industry has not hurt the broader market's rally to record highs.
But reservations over hiring in hospitality may diminish a faster and sustainable economic comeback.
