In the wake of a harsh winter in many parts of the country, job gains in several sectors of the labor market have slowed, including accommodations and travel.
Mark Zandi, chief analyst at Moody’s Analytics, observed that overall employment gains in the United States in March were on the soft side, with the Bureau of Labor Statistics reporting that 126,000 jobs were added in March—significantly lower than February’s gain of nearly 300,000 jobs. The unemployment rate held steady at 5.5 percent nationwide.
Zandi explained that there are some contributors to the slowdown that could have a long-lasting impact, such as the surge in the value of the dollar. While he said 300,000 job gains per month may not be sustainable moving forward, the poor weather factor is only a temporary employment restriction that the hospitality industry can bounce back from as soon as weather improves.
ADP data found that small business employment grew by 108,000 and franchise employment grew by 20,000, but the accommodations sector showed a decrease of 1,700 jobs. Ahu Yildirmaz, vice president and head of the ADP Research Institute, agreed that the winter conditions influenced hospitality employment.
“Severe weather continues to impact the overall accommodations sector,” she said. “Both the franchise market and total U.S. accommodations market have experienced a slowdown in job growth in recent months.”
Even so, Yildirmaz found positives in the accommodation sector’s performance long term.
“It looks like the franchise accommodations sector is performing relatively better than the entire accommodations sector as a whole,” she said. “Compared to a year ago, employment in franchise accommodations grew 1.8 percent while the entire total accommodations workforce grew at a slower rate of 0.8 percent.”
There were also some losses in the travel industry. David Huether, senior vice president for economics and research at the U.S. Travel Association, says that after eight months of consecutive gains, travel employment declined by 4,000 jobs in March.
“Still, one month does not make a trend, and travel job growth in the first quarter of 2015 averaged 7,200 jobs per month,” Huether explained. “The travel industry continues to support more than 8 million direct jobs since the employment recovery began, outpacing job growth in the rest of the economy by 37 percent.”