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Low Jobless Claims Show Labor Market Strength: 3 Staffing Picks

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There are fresh signs of a tight labor market as the latest U.S. Labor Department data revealed that jobless claims for the week ended Mar 23 fell to a two-month low. The figure was 211,000, down 5,000 from the previous week’s revised level and much below the consensus estimate of 222,000.

The four-week moving average, which is considered a better measure of labor market trends as it evens out the sharp fluctuations in weekly reports, declined 3,250 from the previous week's revised average to 217,250.

This was the 207th straight week in which filings stayed below the 300,000 threshold, the longest streak since 1970. Annual revisions in seasonal adjustment factors revealed that filings have been lower than previously reported since late January.

Labor Market Conditions Remain Healthy

While the economy continues to create new jobs despite a low jobless rate, which is currently at 3.8%, a tight labor market is compelling companies to pay higher to attract and retain employees.

Average hourly earnings in December increased 11 cents to $27.66, registering 3.4% year-over-year increase, higher than 3.1% witnessed in November.

Manufacturing and Non-manufacturing Solid

The Purchasing Managers' Index (PMI) measured by Institute of Supply Management (ISM) touched 54.2% in February, indicating better economic activity in the manufacturing sector. This marks the 30th consecutive month of manufacturing growth. Also, December was the 109th straight month of growthin non-manufacturing activities, with ISM-measured Non-Manufacturing Index (NMI) touching 59.7%.

Thriving manufacturing and non-manufacturing activities backed by Trump’s favorable policies are keeping the staffing industry healthy.

Jobs Growth to Continue

Non-farm payrolls climbed just 20,000 jobs last month after rising 3,11,000 in January. Although job growth slowed down after last year’s solid gain, the rate of growth remains more than enough to match growth in the working age population.

The Conference Board’s Employment Trends Index increased to 111.15 in February, following a decline in January, registering year-over-year growth of 4.3%.

According to Gad Levanon, Chief Economist at the Conference Board, “We still expect employment to grow fast enough for the labor market to tighten further in 2019, making it easier for job seekers to find a job. One of the ETI components, the percent of respondents who say they find 'Jobs Hard to Get' from The Conference Board Consumer Confidence Survey®, is now at the lowest rate since 2000."

Staffing Stocks Should be Prudent Investments

With indications that the staffing market will keep on growing through 2019, staffing stocks should appreciate in the near to mid-term. Below, we have mentioned three staffing stocks that offer high yields along with good growth prospects.

Our Growth Style Score condenses all the essential metrics from the company’s financial statements to get a true sense of the quality and sustainability of its growth. Our research shows that stocks with Growth Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy) offer the best investment opportunities in the growth investing space.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Insperity Inc. (NSP - Free Report) , engaged in providing human resources and business solutions in the United States, sports a Zacks Rank #1 and has a Growth Score of A. The stock has rallied a massive 30.6% year to date.

The company’s expected earnings growth rate for the current year is 22.4%. The Zacks Consensus Estimate for current year EPS has improved 6.5% in the past 60 days.

Insperity, Inc. Price, Consensus and EPS Surprise

Heidrick & Struggles International, Inc. (HSII - Free Report) , a provider of executive search, culture shaping, and leadership consulting services in the Americas and internationally, also sports a Zacks Rank #1 and has a Growth Score of A. This stock has gained 25.8% year to date.

The company’s expected earnings growth rate for the current year is 3.2%. The Zacks Consensus Estimate for current year EPS has improved 6.6% in the past 60 days.

Heidrick & Struggles International, Inc. Price, Consensus and EPS Surprise

Robert Half International Inc. (RHI - Free Report) , a provider of staffing and risk consulting services in North America, South America, Europe, Asia, and Australia, carries a Zacks Rank #2 and has a Growth Score of A. This stock has gained 12.7% year to date.

The company’s expected earnings growth rate for the current year is 13%. The Zacks Consensus Estimate for current year EPS has improved 4.1% in the past 60 days.

Robert Half International Inc. Price, Consensus and EPS Surprise

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