Tampa's jobs boom is bucking the trend

The Tampa Bay area suffered a sharp decline in employment at the beginning of the Covid-19 pandemic, but its jobless rate is now among the nation's lowest. Unusually, the fastest-growing sector in the past year has been leisure and hospitality. Even more unusual, employment in the sector now exceeds its pre-pandemic level. What's going on?

 

Key takeaways
  • The Tampa area is on track to surpass its pre-pandemic trend in overall employment
  • The leisure and hospitality sector is leading the way, with a 12-month increase in employment of almost 12% 
  • This increase does not appear to rely on rising tourism spending

Tampa's unemployment rate was 2.5 percent in September, indicating one of the nation's tightest labor markets. In the previous year, employment in leisure and hospitality had risen by almost 12%, the fastest growth of any sector. Despite Tampa's location and reputation, this sector only accounts for about one in eight jobs in the metro area. Yet it is indicative of a broader trend in the market.

A surprising comeback

Employment in leisure and hospitality in the Tampa area dropped by almost half at the onset of the pandemic. But by early this year, it had recovered all of its losses and was poised to keep growing:

8 Nov 2022 Tampa leisure and hospitality

This growth has come in sharp contrast to the situation in the nation as a whole, where the leisure and hospitality sector still has a million fewer employees than it did in February 2020.

What explains this anomaly? Looking at a more granular level, we can see that food and drink establishments have been driving the change. While jobs in accommodation have yet to recover, jobs in boozing and dining have exceeded their previous highs:

8 Nov 2022 Tampa hospitality industries

"Food services and drinking places" is a much larger category in the government's statistics than "accommodation", and its roughly 10,000 new jobs are driving much of the growth in the sector as a whole. But why would these two trends diverge?

The simple answer is that employment in leisure and hospitality is being driven by residents – who don't need "accommodation" – rather than tourists. Though Americans have shifted billions of dollars in spending into leisure and hospitality (including tourism), Tampa has also picked up plenty of residents since the start of the pandemic. Here is what total non-farm employment looks like in the area:

8 Nov 2022 Tampa total non-farm-1

Employment in the Tampa area is still running below the pre-pandemic trend, but it's on a steep incline that will likely pass the old trend line soon.

More evidence of new residents

As we'd expect, an overall influx of jobholders (and possibly retirees as well) has also created more work in construction, another industry where employment now exceeds its pre-pandemic high:

8 Nov 2022 Tampa construction

These figures, which are seasonally adjusted, also suggest that new residents, rather than tourists, have added strength to the labor market's recovery in Tampa. Indeed, several other sources have named the Tampa area as a top destination for domestic migration since the pandemic began.

Not surprisingly, flexible work has been growing alongside the rest of the labor market. Instawork has been staffing increasing numbers of shifts in both hospitality and light industrial roles in 2022, and we expect the volumes to keep rising in the years to come.

These links offer more information:

Instawork Local Labor Market Resources

Bureau of Labor Statistics: Economic Summary

State of Florida Workforce Statistics

City of Tampa Workforce Development

 

Realtime metrics

These metrics, derived from data aggregated across the Instawork platform, compare the two weeks starting 11/3/2022 to the previous two weeks. To control for the overall growth of the Instawork marketplace, only shifts involving businesses that booked shifts in both periods are included:

  • $0.05 drop in hourly pay

  • 1.1% point drop in share of short-notice shifts

  • 2.1 hours rise in hours per existing worker

To receive future briefings and data insights from our Economic Research team, please subscribe below. Follow Daniel Altman on Twitter at @AltmanEcon or on LinkedIn.

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