Hospitality Industry’s Fledgling Recovery Drives Down Unemployment Rate

Hospitality and leisure added 1.2 million jobs in May

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Led by gains in the leisure and hospitality industry, the U.S. gained 2.5 million jobs in May, an about-face that stunned economists and financial experts, many of whom predicted U.S. unemployment would reach 20% as the Covid-19 pandemic continues. Instead, the rate declined from a historic high for 14.7% in April to 13.3% last month.

“These improvements in the labor market reflected a limited resumption of economic activity that had been curtailed in March and April due to the coronavirus (COVID-19) pandemic and efforts to contain it,” the U.S. Department of Labor said in a statement.

Employment in the leisure and hospitality industry, which includes jobs in arts, entertainment, recreation, accommodation and food services, accounted for almost half of those jobs, increasing by 1.2 million in May, following losses of 7.5 million in April and 743,000 in March.

The fall in unemployment mirrors a small uptick seen throughout the travel industry, as major hotel brands like Marriott and Hilton see their occupancy increase and airlines like American are adding flights to prepare for a busier than expected summer travel season.

However, unemployment in the travel industry is still at historic levels, and there are likely greater hurdles to come: The airline industry has been barred from making any layoffs before Sept. 30, after which they are no longer bound by law to keep employees on the payroll under the terms of their bailout. According to the International Air Transportation Association, passenger demand in April fell 94% year-over-year. Marriott has said that it has extended its furloughs into the fall.

Employment in the retail sector also rose by 368,000 after a loss of 2.3 million jobs in April, most of which occurred in clothing and accessories stores.

@RyanBarwick Ryan is a brand reporter covering travel, mobility and sports marketing.