The U.S. economy added 151,000 workers in February, according to federal data released Friday, while the unemployment rate ticked up to 4.1%. Hiring picked up slightly from January but fell short of the average number of jobs added each month in 2024.
The restaurant industry cut 27,500 jobs in February, deepening this year’s workforce decline that also included the shedding of 15,700 jobs in January. It’s been a challenging start to the year for many restaurant concepts, given inclement weather, wildfires in Los Angeles, and the highest flu rates in a decade. Additionally, consumer confidence fell off a cliff in February, hitting a 15-month low driven by stubborn inflation and policy concerns over issues such as tariffs and Medicaid cuts.
The slow start to the year comes after a strong finish in 2024 in which the industry added nearly 46,000 jobs in December and, in total, a net 148,000 jobs during the second half. As of January 2025, the industry is about 0.6% higher than its pre-pandemic (February 2020) employment peak, according to the National Restaurant Association. That employment picture, however, is uneven across segments. Quick-service and fast casual concepts are 2.5% above pre-pandemic levels, while the full-service segment is about 4.1% below the February 2020 benchmark. The coffee and snack segment has registered the strongest recovery and is up more than 20% over pre-pandemic levels.
Industry job growth is also uneven across states. As of December 2024, 22 states had fewer jobs than they did in December 2019, according to the association. Maryland has the highest loss (-8%), followed by Maine, Vermont, Louisiana, Oregon, and North Dakota.
That said, 28 states and the District of Columbia are above pre-pandemic employment levels, led by Nevada (13%), Utah, Montana, and Oklahoma.
Overall, most operators (77%) continue to be significantly challenged by recruitment and retention, according to the National Restaurant Association’s State of the Industry report, released last month.
Still, despite two consecutive months of retrenchment, the association expects the industry to add about 200,000 jobs in 2025, which would bring the total number of restaurant and foodservice jobs to 15.9 million by the end of the year. Between 2025 and 2035, the industry is projected to add an average of 150,000 jobs a year, with total staffing levels reaching 17.4 million by 2035.