In his latest commentary, the National Restaurant Association's Chief Economist Bruce Grindy analyzes the latest jobs report. Both restaurants and the overall private sector registered solid job growth in October, as the government shutdown had little impact. However, restaurant operators’ outlook for economic conditions sunk to a nine-month low.
Job growth surprised to the upside in October, as the private sector shrugged off the partial government shutdown to register its largest monthly gain in eight months. According to preliminary data from the Bureau of Labor Statistics (BLS), the private sector added a net 212,000 jobs in October, the strongest performance since a gain of 319,000 jobs in February.
In addition, BLS upwardly-revised job growth in both August (207,000) and September (150,000), which resulted in an additional 70,000 jobs added during those two months. In total, the private sector added nearly 1.9 million jobs during the first 10 months of 2013, and is on pace to post growth of at least 2 percent for the second consecutive year.
Putting this in context, the private sector hasn’t strung together consecutive years of at least 2 percent growth since 1999 and 2000. That’s the longest streak since data collection began in 1939.
Restaurant-industry employment gains were also decidedly positive in October, as eating and drinking places added a net 29,000 jobs. As with the overall private-sector numbers, BLS revised restaurant figures higher in both August and September, which added nearly 50,000 jobs to the industry’s employment base.
Overall, eating and drinking places added more than 305,000 jobs during the first 10 months of 2013, which has already exceeded the total jobs added during all of 2012.
Although the government dysfunction didn’t necessarily disrupt business operations in October, it did dampen the expectations of restaurant operators. In the National Restaurant Association’s October 2013 Tracking Survey, only 19 percent of restaurant operators said they expect economic conditions to improve during the next six months. Twenty-eight percent said they expect economic conditions to worsen in six months, while 53 percent think conditions will stay about the same as they are now. This marked the first time in nine months that restaurant operators had a net negative outlook for the economy.
In addition, government (29 percent) and the economy (21 percent) were identified by restaurant operators as the top challenges facing their business in October, which represented the 14th consecutive month that these two items topped restaurant operators’ list of concerns.
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U.S. Private Sector Job Growth
Source: Bureau of Labor Statistics; figures are seasonally-adjusted