Board of Governors of the Federal Reserve System

Figure 1. The shortfall in leisure and hospitality employment

This chart shows total seasonally adjusted employment from 2019 to mid-2023 in the leisure and hospitality industry, along with total employment in the rest of the private sector. Both series are indexed to 100 in February 2020, with modest growth over the preceding year. While both series show a substantial decrease in employment following the start of the pandemic, the drop in leisure and hospitality was much greater, initially falling to almost 50 percent of pre-pandemic employment, while other private employment fell slightly over 10 percent. Employment in leisure and hospitality quickly rebounded, but a shortfall of several percentage points has persisted into 2023. By contrast, employment in the rest of the private sector has now surpassed pre-pandemic levels. Both series increase consistently following the initial plummet, except for a small decrease in leisure and hospitality employment near the end of 2020.

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Figure 2. Leisure and hospitality employment by metro category

This chart shows leisure and hospitality employment from 2019 to mid-2023 across three different metro categories: “Dense urban cores”, “Other urban counties”, and “Rural counties.” All three series are indexed to 100 in February 2020 and show similar, modest growth over the preceding year. The chart shows a clear relationship between these metro categories and the extent of the post-pandemic recovery in leisure and hospitality employment. The largest drop in employment occurred in dense urban cores, and the recovery for this category still lags behind the other two. For other urban counties and rural counties, the recovery was much quicker. The recovery for rural counties has maintained a slight edge over other urban counties since the initial drop in employment, and employment in rural counties has now reattained its pre-pandemic level. All three series show a noticeable drop in employment near the end of 2020.

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Figure 3. Trips to leisure and retail establishments by metro category

This chart shows the indexed level of trips to restaurant, recreation, and retail establishments from 2020 to 2022, where February 2020 equals 100. These changes are reported for three metro categories: “Dense urban cores”, “Other urban counties”, and “Rural counties.” The series are not seasonally adjusted and show strong seasonal patterns, with the number of trips tending to fall in the winter. All three series show an upward trend since plummeting early in the pandemic. Dense urban cores saw not only the largest drop in trips to retail and recreation establishments, but also the most persistent shortfall. Leisure and retail trips in rural counties and other urban counties are still below pre-pandemic levels, although the recovery in rural counties has been consistently stronger and briefly surpassed pre-pandemic levels in summer 2021.

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Figure 4. Available leisure and hospitality jobs by metro category

This chart shows leisure and hospitality job openings by metro category from 2019 to 2022. These changes are reported for three metro categories: “Dense urban cores”, “Other urban counties”, and “Rural counties.” All three series are indexed to 100 in February 2020 and show essentially no changes over the preceding year. While all three categories saw a large and persistent shortfall in available jobs, the drop was largest and the recovery was slowest for dense urban cores, and the number of jobs in these cores is still a few percentage points below its pre-pandemic level. The recovery was similar for other urban areas and rural areas, with the employment shortfall in other urban areas being slightly but consistently larger since the start of the pandemic. Both of these categories now show levels of available jobs greater than their pre-pandemic values.

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Figure 5. Restaurants and bars by metro category

This figure shows the seasonally adjusted number of restaurants and bars across three different metro categories: “Dense urban cores”, “Other urban counties”, and “Rural counties.” The series for each category is indexed to 100 in the first quarter of 2020. The chart begins in 2019 and shows a similar growth in establishments across metro categories prior to the pandemic. All three metro areas saw a drop in restaurants and bars by about one to two percent during the first quarter of the pandemic. The number of bars in rural areas and other urban cores quickly began growing again at a pace similar to or greater than the respective paces in 2019, with both easily surpassing their pre-pandemic levels and essentially recovering to their pre-pandemic trend. However, the recovery for other urban areas consistently lagged behind the rural recovery, and a second slight downturn in the first quarter of 2021 further widened this gap. After experiencing the largest drop in restaurants and bars during the pandemic, dense urban cores made limited gains through the first quarter of 2021. Through 2021 and 2022, however, the growth rate in dense urban cores returned to the pace observed prior to the pandemic, and the number of restaurants and bars surpassed its pre-pandemic level in late 2021. With that said, the number of restaurants in bars in dense urban cores remains substantially below the value extrapolated from the pre-pandemic trend.

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