June Jobs Report Bodes Well For Foodservice, As Does Consumer Confidence

Few indicators are more central to the foodservice outlook than employment growth. The monthly Employment Situation Report from the Bureau of Labor Statistics for June was again quite positive with the net addition of 195,000 non-farm payroll workers and upward revisions of both April and May counts to 199,000 for April (from 149,000) and 195,000 for May (a 20,000 increase). The numbers exceeded most economists’ expectations and, though just a continuation of the slow recovery in employment, are likely to help foodservice by buoying consumer confidence.

While the growth numbers were good, the unemployment rate held steady at 7.6% as more people re-entered the jobs market. The number of unemployed persons also changed little at 11.6 million while the number of involuntary part-time workers, affected among other things by the furloughs caused by the federal budget sequester, rose by 322,000 to 8.2 million.

It’s interesting that one of the biggest drivers of the gain was employment in leisure and hospitality, with an overall 75,000 increase and a 52,000 jump in foodservice employment. (More on that in related story this issue.) Nearly all the growth was in generally lower-paid, service-providing jobs, as slight growth in construction was offset by a slight loss of manufacturing jobs. Jobs in retail, healthcare, professional and business services including temporary help services and higher paid financial services were the major gainers.

The improved employment situation is credited with gains in consumer confidence the past few months. Such confidence is also an important foodservice driver. The final June reading of consumer sentiment by the Thomson Reuters/University of Michigan Surveys held at 84.1, down only slightly from the 84.5 sentiment index level in May. The two months have seen the highest levels on sentiment since 2007. The Conference Board’s Consumer Confidence Index, generally more volatile, rose sharply again in June, up to 81.4 from 74.3 in May.

Early indications are these numbers, both on jobs and confidence, continued to boost restaurant and other foodservice sales in June.