Economic Commentary
Bruce Grindy

Bruce Grindy is the National Restaurant Association's senior economist Check out Bruce's past articles.

Restaurant-industry Job Growth Will Continue to Outpace Economy in 2006

March 10, 2006

Eating-and-drinking places have experienced job growth in 35 of the last 36 months.

The restaurant industry remains one of the strongest industries in terms of job growth in the United States, according to today’s employment report from the Bureau of Labor Statistics, a division of the U.S. Department of Labor. Eating-and-drinking places -- the primary component of the restaurant industry, accounting for roughly three-fourths of the total restaurant-and-foodservice workforce -- added nearly 21,000 jobs in February on a seasonally-adjusted basis.

February marks the 35th month that eating-and-drinking places added jobs in the past 36 months. The only month that restaurants lost jobs in the past three years was September 2005, in Hurricane Katrina's aftermath.

All told, eating-and-drinking places have added nearly 726,000 jobs over the past 36 months, about 16 percent of net jobs added to the national economy over that time. The growth is particularly impressive considering that eating-and-drinking-place employment accounts for a relatively smaller 7 percent of the U.S. workforce.

Overall, the restaurant-and-foodservice industry provides 12.5 million jobs in the United States, more than 9 percent of the total workforce.

On an annual basis, eating-and-drinking places added jobs at a solid 2.8 percent rate in 2005, nearly double the national job growth of 1.5 percent. 2005 marked the 14th consecutive year of job growth in the restaurant industry.

The restaurant industry has been an employment juggernaut even as other industries experience job losses. While the overall economy posted job losses in 2002 and 2003, restaurant-industry employment grew. In fact, eating-and-drinking-place job growth outpaced the overall economy in each of the last six years.

This trend is expected to continue in 2006. The National Restaurant Association projects that eating-and-drinking-place employment will grow 2.2 percent this year, slightly above the 1.9 percent gain expected in overall employment.

Within the restaurant industry, the quickservice-restaurant segment added jobs at a solid 3.3 percent rate in 2005, while fullservice restaurants registered job growth of 2.4 percent. The drinking-place sector saw a 2.5 percent decline in jobs in 2005, the fourth consecutive annual decline in jobs in this sector.

The real powerhouse for job growth in 2005 was the snack and nonalcoholic-beverage-bar sector, which led the restaurant industry in job growth for the fourth consecutive year. This segment of the foodservice industry, which includes coffee, donut and ice cream shops, added jobs at an impressive 8.5 percent rate in 2005 on an annual basis, according to figures from the Bureau of Labor Statistics. Between 2001 and 2005, this burgeoning sector added jobs at an average rate of 8 percent a year, dwarfing the 0.3 percent average annual gains in the economy as a whole. Over the same four years, eating-and-drinking places added jobs at an average annual rate of 2.1 percent.

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