US Economy Adds 172,000 Jobs in May Ahead of FIFA World Cup
The US economy generated 172,000 jobs in May, with pubs, bars, and restaurants significantly increasing their staff in preparation for the upcoming FIFA World Cup. These new positions were largely concentrated in leisure and hospitality, local government, and healthcare, as reported by the Bureau of Labor Statistics (BLS).
This employment surge precedes this summer's tournament, which will be jointly hosted by the US, Mexico, and Canada. While the overall unemployment rate remained at 4.3%, the financial sector experienced a decline in employment.
Rehan Alam, proprietor of The Red Lion pub and restaurant in New York City, has enlisted seven additional bartenders to manage the anticipated influx of customers once the World Cup commences. Alam noted that the business was overwhelmed during the 2022 Qatar tournament and expects an even greater boost this year, particularly with matches taking place in nearby New Jersey. He has invested in new televisions and sound engineering, in addition to substantially increasing staffing levels. Alam stated that this boost is “definitely needed” as firms contend with escalating costs stemming from the economic fallout of the US-Israel war with Iran, which has driven up energy prices and other operational expenses.
The BLS indicated that leisure and hospitality businesses created 70,000 jobs in May, a substantial increase from the average monthly gain of 14,000 over the preceding year. Specifically, food and drink establishments accounted for 48,000 of these new jobs. This robust hiring trend exceeded economists' expectations of 105,000 new jobs, underscoring the US economy's resilience despite the rising business costs exacerbated by geopolitical tensions.
However, concerns persist regarding the sustainability of an economic boost, given the exorbitant prices facing World Cup attendees. Hotels have reported sluggish bookings, and fans have voiced complaints about being priced out of the tournament. US President Donald Trump himself remarked he “wouldn’t pay it either” regarding a $1,000 ticket for a June match. FIFA is currently under investigation by the Attorney Generals of New York and New Jersey over allegations of “artificially inflating prices” and “misleading fans.”
Economists suggest these strong job figures could increase the likelihood of an interest rate hike by the end of 2026, though slowing wage growth signals increasing pressure on household finances. Average hourly earnings rose by 3.4% over the past year, while US inflation stands at 3.8%. The primary driver of this inflation has been soaring energy prices, largely attributed to the Iran war, which has seen the crucial Strait of Hormuz shipping lane effectively closed for months. James Knightley, ING's chief US economist, highlighted the intensifying squeeze on household spending power, with real disposable incomes declining for three consecutive months and consumer confidence near historic lows.
Beyond hospitality, local government employment increased by 55,000 jobs, and the healthcare sector added 35,000 positions. Gains were also observed in social work, mining, quarrying, and oil and gas extraction. Conversely, the financial services sector saw a decline of 22,000 jobs in May, contributing to an overall reduction of 105,000 financial services jobs since May of last year.
