HOUSTON – Year-over-year job growth remains strong in Houston, but a new report suggests the numbers are slowing. Job watchers are concerned that losses the leisure and Hospitality sector could signal bad news.

Chris Smith has seen it first-hand. He says closing his restaurant was among the hardest things he’s ever done, “The hard part was thinking about how it impacts my employees and my customer base.” 

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Frankie’s Italian Kitchen was open in Fulshear for six years and just completed a recent move into a bigger space to accommodate growing crowds. Just over a week ago, however, the doors closed for the final time. 

Smith says, among the challenges in a business that’s ‘hard’ on the best of days, was finding enough motivated people to keep everything going. 

“To find good quality people that really want to make this a career is not as easy as it used to be,” says Smith, “It was never easy, but it’s much harder now.”

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Gulf Coast Workforce Solutions economist Parker Harvey says the problem is significant, “We’re going into, essentially, peak summer vacation season, and we saw a massive loss of jobs in the leisure and hospitality space.” 

Job growth for the Houston-area remains strong year-over year, at about 120,000, but the June snapshot is considered mediocre, particularly in the leisure and hospitality sector that saw a loss of 6,000 positions for the month. 

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Parker says part of the problem is a mismatch of expectations and compensation between workers and employers. While it could also signal tighter discretionary spending, Harvey points to moderating local inflation and strong sales in durable items, like cars. 

“These are the things that signal that people still feel good about the economy,” he says. “So when you see a major pullback in a discretionary area, like hospitality, it’s just really hard to make sense of what’s going on.”

Even if recent hospitality job losses are unusual, Workforce Solutions says the next four months typically see those numbers decline, as summer and travel wraps up for the year. It leaves a big question whether restaurants closing their doors is unusual or a sign of the times.