A widely expected World Cup-related boost to US employment has failed to materialise, with new figures showing a decline in jobs across parts of the leisure sector.
According to the Bureau of Labor Statistics (BLS), employment in restaurants, bars, and hotels fell by 61,000 in June, despite earlier forecasts predicting growth linked to the tournament hosted jointly by the United States, Canada, and Mexico.
Overall US employment still rose by 57,000 during the same period, although this increase was weaker than expected. The unemployment rate also edged down slightly to 4.2%.
Earlier data had suggested signs of a potential hiring surge, with May figures indicating that bars and restaurants were increasing staffing levels ahead of the World Cup. Some analysts, including those at Goldman Sachs, had predicted that June could see a net gain of around 40,000 jobs driven by increased demand in the hospitality sector.
However, those expectations did not materialise, with the sector instead experiencing a reversal in momentum. Reports of high tourist activity and crowded venues did not translate into sustained employment growth.
ING chief US economist James Knightley described leisure and hospitality as a “real area of weakness” in the latest labour market data, highlighting the contrast between expectations and actual performance.
He added that the fall in employment was “a major surprise given the World Cup is on and bars and venues are busy,” noting that although the sector had recorded a 44,000 increase in May, the latest figures were still unexpectedly weak.
He also pointed out that Thursday’s labour report included substantial downward revisions to earlier estimates, with job gains for April and May now collectively 74,000 lower than previously reported by the Bureau of Labor Statistics (BLS).
According to him, these revisions—combined with the weaker-than-expected June data—suggest that the recent improvement in employment over the past few months may not represent the beginning of a sustained upward trend.
He further argued that the slowdown reduces the likelihood of an interest rate hike later this month.
Separately, Susannah Streeter, chief investment strategist at Wealth Club, said the softer jobs data could help support what she described as a “Goldilocks scenario” for the US economy, where growth remains balanced—“not too hot, but not too cold.”
She added that expectations of multiple rate increases are now fading, with markets currently pricing in only one additional hike, likely not until next year.
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