Employment, inflation, and the aftermath of an ongoing pandemic — here’s our wrap-up of the second quarter of 2022 for the restaurant industry.
Here we are — halfway through 2022 and well into two years of dealing with the impacts of a pandemic. While our industry is still under some severe heat — the source of that heat has changed dramatically since reopening and beginning to rebuild that elusive new normal. As we look at the second quarter of the year, there have certainly been some wins for our industry and new challenges to stay ahead of in the third quarter.
To keep you abreast of the employment and economic updates — here is our breakdown of the state of the industry.
Once again, the second quarter of 2022 showed strong job growth in the hospitality industry. According to the Bureau of Labor Statistics Employment Situation Report, Leisure and Hospitality gained a notable 67,000 new jobs in June and is considered one of the top three growing industries overall.
While this is excellent news, employment in hospitality is still about 7.8% down from February 2020, suggesting that we haven’t entirely bounced back. But it’s all about perspective, right? Let’s focus on the fact that this number has shrunk almost a whole percentage point since last quarter — displaying another upward trend for our industry.
With the rising costs of food, gas, employment, and rent — inflation is undoubtedly a top concern for restaurant owners, managers, and workers nationwide. Contrary to the building concern, The National Restaurant Association showed that restaurant sales continued on an upward trend in Q2, totaling $85 billion in May. That’s up 0.7% from April suggesting inflation has not significantly impacted consumer spending or job growth at this time.
While the numbers don’t show an immediate reason for alarm, a survey performed by the NRA shows that 40% of operators surveyed don’t believe this upward trend will hold out over the coming months. “While operators’ growing economic pessimism does not guarantee that a recession is imminent,” the report states. “It has risen to a level that requires close monitoring in the months ahead.”
Rising interest rates
To control inflation, the U.S. Federal Reserve raised interest rates three-quarters of a percentage point, and there is talk that they could raise interest rates again. While the impact of rising rates on consumer spending is stressful, it surprisingly doesn’t mean much for restaurants yet.
According to Restaurant Business Online, there haven’t been signs that restaurant expansion is slowing down. While interest rates for borrowers are higher, they’re not as high as pre-pandemic. That said, we should all be aware of how a rise in interest rates will impact consumer behavior moving into Q3. Hopefully, restless spenders who’ve had their fill of eating at home due to the pandemic will be on our side as we monitor our way through this economic situation.
Despite concerns over the current state of our economy, quarter two showed growth overall, and to end on an even brighter note, job seeker activity is up! We saw a 7.6% increase in seeker registrations on Poached between May and June — showing that now is a great time to hire. As an industry, we’ve been through a lot over the years, and while quarter three might be another struggle — we will get through this too. Until next time!