Far Worse Than Feared? US Economy Loses 60,000 Hospitality Jobs in Huge Blow to Trump

The US economy added just 57,000 jobs in June, according to the latest employment report, with a shock loss of 61,000 hospitality jobs nationwide that has handed Donald Trump an awkward economic setback months before the World Cup and the America 250 celebrations are meant to turbocharge hiring.

Hiring in the US had been expected to remain relatively solid as inflation cooled and major global sporting events loomed. Analysts at FactSet forecast around 100,000 new jobs last month, while Goldman Sachs suggested the World Cup alone might swell payrolls by 40,000 positions. Instead, the headline jobs figure came in barely above half the prediction, and the hospitality sector, which should be gearing up for a tourism boom, went into reverse.

The overall unemployment rate in June was reported at 4.2%, a marginal improvement on May's 4.3%, but the stronger-looking rate masks what is happening under the bonnet of the labour market. The labour force participation rate slipped 0.3 percentage points to 61.5%, its lowest level since March 2021, signalling that fewer Americans are either in work or actively looking for it. Household employment tumbled by 507,000, meaning more than half a million fewer people told survey takers they had a job.

Economists often warn that a falling unemployment rate can sometimes be the wrong kind of good news. Here, the drop is tied to people exiting the workforce, not to an economy pulling jobseekers into work. That nuance is likely to feature heavily in the political spin war, not least for a Trump campaign that has staked its appeal on restoring what it casts as stronger, more 'American' jobs growth.

Hospitality Jobs Slump Exposes World Cup Hopes

The hospitality jobs collapse stands out. According to the data, accommodation and food services shed 61,000 jobs in June, a brutal reversal at a time when seasonal hiring is usually ramping up. Officials said the figures reflected slower-than-usual summer recruitment, a worrying sign given that the US is preparing to host the World Cup and gearing up for the America 250 commemorations of the country's founding.

Goldman Sachs had previously argued that the World Cup could lift payrolls by about 40,000 positions. On the face of it, the loss of 61,000 hospitality jobs suggests those hopes have hit a wall, or at least been delayed. It remains unclear from the latest data whether any of the forecast World Cup boost has yet materialised, and the report does not spell it out. IBTimes UK could not independently verify whether the Goldman prediction came true, so that should be taken with a grain of salt.

Other sectors did grow, albeit not enough to offset hospitality's slide. Professional and business services added 36,000 jobs, the largest single gain. Social assistance roles increased by 25,000, and healthcare posted a 22,000 gain, which was described as slower than its typically robust pace. Government-linked employment rose by 8,000.

CNBC reported that average hourly earnings ticked up 0.3% over the month and 3.5% year on year, figures that were broadly in line with consensus forecasts. That kind of steady wage growth, paired with weaker hiring, will not make the US Federal Reserve's life any easier as it tries to judge whether inflationary pressures have really cooled or are just lurking in the background.

Trump's Boasts Undermined By Grim Jobs Reality

The hospitality jobs plunge is politically awkward for Trump because it fits a pattern that undercuts his central claim of superior economic stewardship. Earlier this year, the Bureau of Labor Statistics revised its figures and concluded that job growth under Trump had been significantly weaker than initially reported.

According to that revised report, instead of the 584,000 jobs that had been expected, an average of 49,000 a month, the US economy added only 181,000 jobs last year of his term, around 15,000 a month on average. That is not just a rounding error. It transforms what his allies presented as a resilient labour market into something distinctly anaemic.

Trumpworld tried to get ahead of the bad news. In February, senior trade and manufacturing counsellor Peter Navarro appeared on Fox News' 'Mornings with Maria' to warn that the upcoming jobs report would be lower than usual. Navarro told viewers: 'The jobs report's going to come out tomorrow. We have to revise our expectations down significantly for what a monthly job number should look like.'

He then rolled out a sprawling explanation centred on immigration, claiming that when the US was 'letting in 2 million illegal aliens' it had to generate 200,000 jobs a month to maintain a steady state. Navarro alleged that during Joe Biden's presidency, 'all of the jobs that we were creating in Biden's years were going to illegals' and that 'Americans were going to the unemployment lines.'

He went further, insisting that Wall Street would need to adjust to a new normal because the Trump administration was deporting 'millions of illegals out of our job market.' Yet when host Maria Bartiromo pressed him on whether he was expecting weak numbers, Navarro insisted: 'Not expecting a weak number. I'm just saying that going forward, when we see a number under 100,000, we don't wring our hands.'

The problem now is that US hiring has fallen to 57,000 and hospitality has lost 61,000 jobs even as Trump is back on the political stage presenting himself as a jobs president. If sub‑100,000 monthly gains are, in Navarro's view, nothing to fuss about, voters staring at shuttered bars or cancelled shifts in hotels might beg to differ.

The broader backdrop is hardly gentle. Inflation and global conflict have created a twitchy environment for employers, who appear to be pulling back despite major events on the horizon that should, in theory, be good for business. The labour force participation slide hints at workers who are discouraged, retired early, or juggling unpaid care. Some may well return as World Cup construction and tourism demand kick in, but there is no guarantee. The hospitality numbers show how quickly those hopes can turn to smoke.

For now, the data leave the Trump camp in an odd position. They want credit for any good economic headline and a pass on anything ugly. The June report, particularly the loss of 60,000 plus hospitality jobs, makes that a much harder sell.