Bars, hotels and restaurants become the economy’s fastest-growing employers

Hotels, restaurants, and bars, some of the hardest hit industries during the pandemic, are leading the recovery and job growth, now the fast-growing employers.

Operators of hotels, bars and restaurants—hit hard as the Covid-19 pandemic took hold—are now among the country’s fastest-growing employers, offsetting a slowdown in tech-related hiring.

The leisure-and-hospitality industry is rebuilding its workforce after cutting back during the pandemic’s early days. In contrast, companies focused on providing business and tech-related services have slowed their growth in recent months.

Because the hospitality industry includes a larger number of private-sector jobs than the tech and information sectors, the shift in hiring patterns has helped keep the U.S. unemployment rate at a 53-year low and the overall job market tight.

Professional and business-services companies and the tech-heavy information sector were among the industries to add workers at the fastest pace early in the pandemic

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The information industry accounts for about 1-in-40 private-sector jobs. The larger and harder-hit healthcare and hospitality sectors make up almost 30% of private jobs, and they were dealing with declines in employment.

Throughout the first half of 2022, hiring for information jobs continued to grow and the hospitality industry outpaced most other industries.

Since mid-2022, the growth in information jobs has slowed relative to the rest of the economy, while the hospitality and healthcare businesses have been among the fastest-growing industries.

And in the past two months, the information sector has lost jobs.

"The sectors that are seeing above-average layoffs are those that saw explosive head-count growth after the pandemic," said Julia Pollak, chief economist at jobs site website ZipRecruiter.

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Meanwhile, the hospitality and healthcare industries combined to add 207,000 workers in January, or nearly half of that month's private-sector gains.

Since November, about half of job-cut announcements among U.S.-based employers have come from tech companies, according to outplacement firm Challenger, Gray & Christmas.

The cuts partially reverse some of the hiring made during the height of the pandemic, when lockdowns led to increased demand for tech products and services.

Payrolls grew faster at most companies in the S&P 500’s technology and consumer-discretionary sectors during the first two years of the pandemic than during the preceding two-year period, according to a Wall Street Journal analysis of FactSet data.

Share of companies, by S&P 500 sector, that added employees more quickly during the first two years of the pandemic than during the two previous years. Factors such as a return to prepandemic consumer habits, rising interest rates and fears of an economic downturn have prompted some companies to recalibrate their head counts.

Amazon.com Inc., for example, nearly doubled its workforce amid increased demand for its e-commerce, grocery and cloud-computing businesses. The company grew to more than 1.5 million employees at the end of last year from about 800,000 at the end of 2019, FactSet data show. Amazon recently announced layoffs totaling more than 18,000 staffers.

The tech layoffs might not be affecting the broader employment data for other reasons. Job-cut announcements don’t always shrink company workforces as much as promised. Business can improve, vacant jobs can go unfilled and layoffs can sometimes take months to execute.

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Hiring also remains strong among some of the country’s biggest companies. Chipotle Mexican Grill Inc. said in January that the restaurant chain plans to hire 15,000 workers in the U.S. ahead of an expected increase in demand. Some food businesses—such as Kroger Co., the largest U.S. supermarket operator by sales—are recruiting former employees to fill staffing gaps.

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