- The US economy added 172,000 jobs in May, beating forecasts.
- Leisure and hospitality accounted for 70,000 new positions.
- Questions remain over whether the World Cup will translate into stronger consumer spending.
The US jobs market received an unexpected lift in May as businesses hired thousands of extra workers ahead of the FIFA World Cup, helping the economy comfortably outperform forecasts despite rising costs linked to the ongoing energy shock.
According to the Bureau of Labor Statistics (BLS), the US economy created 172,000 jobs during the month, significantly above economists' expectations of 105,000. The unemployment rate remained unchanged at 4.3 per cent.
The figures suggest that preparations for the World Cup, which is being jointly hosted by the US, Mexico and Canada, are already feeding into the labour market. Hotels, bars, restaurants and other hospitality businesses have been expanding their workforces in anticipation of increased visitor numbers and higher demand.
Hiring ahead of kick-off
Leisure and hospitality was the standout sector, adding 70,000 jobs in May, well above the average monthly gain of 14,000 recorded over the previous year.
Food and drink businesses alone accounted for 48,000 of those new roles.
Among those preparing for the tournament is The Red Lion pub and restaurant in New York City. Owner Rehan Alam told the BBC he had hired seven additional bartenders and invested in new television screens ahead of the competition.
He said the venue experienced unexpectedly high demand during the previous World Cup and expects even larger crowds this time because matches will be played nearby in New Jersey.
The hiring surge comes as many businesses continue to deal with higher operating costs. Alam said energy bills and other expenses had increased sharply in recent months, making the anticipated boost from football fans particularly welcome.
The strength of the labour market extended beyond hospitality. Local government added 55,000 jobs during May, while healthcare employment rose by 35,000. Gains were also recorded in social work, mining, quarrying and oil and gas extraction.
While employers appear optimistic enough to hire, there are growing doubts about whether the tournament will deliver the wider economic windfall some businesses had hoped for.
Hotels have reported slower-than-expected booking activity, while some supporters have complained about ticket prices. Concerns over affordability have led to scrutiny of FIFA's pricing practices, with authorities in New York and New Jersey investigating allegations that fans may have been misled about ticket availability and costs.
At the same time, household finances remain under pressure. Average hourly earnings rose by 3.4 per cent over the past year, according to the BLS, while inflation is running at 3.8 per cent. That means wage growth is failing to keep pace with rising prices.
The bigger economic picture
The latest employment figures also reinforced the resilience of the US economy. The government revised March and April payroll data higher by a combined 93,000 jobs, indicating stronger hiring than previously estimated.
However, not every sector shared in the growth. Financial services lost 22,000 jobs during May and employment in the industry has fallen by 105,000 since its peak a year ago.
Economists said the stronger-than-expected jobs data could influence expectations for future interest rate decisions. However, some continue to believe rates could eventually be reduced if energy markets stabilise and supply routes through the Strait of Hormuz reopen.
For now, the labour market appears to be benefiting from World Cup preparations. Whether that hiring boom translates into a broader economic win may depend on how willing fans are to keep spending once the tournament gets underway.
