With job boom in restaurants ‘behind us,’ expect slower payroll growth in 2024
One of the largest contributors to the post-pandemic job market boom is cooling off.
New data from ADP released on Wednesday revealed the US added 103,000 private payroll jobs, below economists expectations for 110,000 job gains. One of the largest lagging sectors of the job market proved to be leisure and hospitality, once an industry that couldn’t find enough workers during the heat of the pandemic. The sector dropped 7,000 jobs in November.
“Restaurants and hotels were the biggest job creators during the post-pandemic recovery,” said Nela Richardson, chief economist, ADP. “But that boost is behind us, and the return to trend in leisure and hospitality suggests the economy as a whole will see more moderate hiring and wage growth in 2024.”
Wednesday’s data comes in line with other signs that the labor market is normalizing from the pandemic. On Tuesday, the latest Job Openings and Labor Turnover Survey, or JOLTS report, released Tuesday revealed the ratio of job openings to the number of unemployed workers fell to 1.34, its lowest reading since August 2021. The unemployment rate has ticked higher over the last several months, rising from its several decade low, and employees haven’t been fleeing the job at the same pace the “quiet quitter” craze in 2021.
Part of that could be because they aren’t be rewarded as much for leaving. Further data from ADP shows annual wage growth for workers changing jobs fell to 8.3% in November, the slowest pace of growth since June 2021. Meanwhile, workers who kept the same job saw wages rise 5.6% last month, the least since September 2021. The reward for switching jobs is now its smallest in three years ADP has tracked the data point.
