Leisure and hospitality gain ground as 2022 opens in hiring boom
Better than expected economic performance signals coming interest rate hike
The leisure and hospitality industry added 151,000 jobs in January, accounting for nearly a third of all positions added to the U.S. economy, according to government figures released Friday.
The robust performance abated fears that the Omicron variant would keep people from returning to the labor market and substantially dent economic activity.
A strong January follows a strong 2021, when job growth averaged 555,000 hirings each month, a total that now reflects recent upward revisions. The job market is “even stronger than we thought,” said Mike Fratantoni, chief economist for the Mortgage Bankers Association, in a statement.
Restaurants and bars added 108,000 positions while hotels and lodging added 23,000, although both sectors remain hobbled by the pandemic.
Some 2.9 million fewer people work in the U.S. compared to before the pandemic, with the leisure and hospitality industry accounting for 62 percent of that gap, or 1.8 million workers. Last week, a 42-story luxury hotel in Times Square once valued at $2.4 billion sold at auction as part of a foreclosure process less than three years after it opened.
Other industries of consequence to real estate have gained ground.
Retailers hired 61,000 people last month. Total employment in construction fell, but more workers were brought on for residential construction. The warehousing and storage industry, a Covid star, now employs 410,000 more people than it did prior to the pandemic.
Hourly earnings rose last month for an annual increase of 5.7 percent, while consumer prices rose an estimated 7 percent during 2021, “meaning that workers’ purchasing power remains crimped,” said Fratantoni.
With the unemployment rate still at a low 4 percent, the Federal Reserve is poised to raise interest rates in March, making borrowing less affordable. The economy would likely grow at a slower rate as a result, cooling inflation.