Cold winter weather conditions and lockdowns imposed by the government to curtail the spread of coronavirus took a toll on the labor market last year. After all, stricter restrictions hampered businesses which eventually led to layoffs.
However, things have improved considerably this year, with February’s solid job additions indicating that the economy is getting its mojo back. Recently, even better March jobs data signified that the economy is now up and running. Notably, March’s job additions were widespread.
Largely, a decline in new coronavirus cases this year compared to last year helped several states relax business restrictions, resulting in more job additions. Further, warmer weather conditions drove employment.
At the same time, a pick-up in the pace of vaccination gave more reason to Americans to eat at restaurants, travel and do a lot of activities, something they would have avoided at the peak of the pandemic. Lest we forget, the government’s massive stimulus and $1400 checks for households gave them more money to spend. All these factors buoyed businesses and led to job growth, especially in the last two months.
Talking about March’s job explosion, per the Labor Department as quoted in a
MarketWatch article, U.S. employers added 916,000 jobs, surpassing economists’ projection of 675,000 additions.
Hiring, particularly, picked up in the leisure and hospitality industry. They added 280,000 jobs in March, reaching the total number of job additions over the past two-month period to 664,000. Restaurants, in particular, saw 176,000 new job additions. More people have now started to go out to eat after being stuck at home in the past year. The numbers are, in fact, expected to improve on more Americans getting vaccinated.
Similarly, employment picked up in the construction industry. Builders added 110,000 jobs last month, the largest hiring in nine months. It’s worth pointing out that the decline in hiring in the construction industry in February was primarily due to poor weather conditions. Nonetheless, moving forward, the construction industry stands to gain on an uptick in construction activities and surge in home sales.
Hiring, by the way, also improved in the industrial side of the U.S. economy. Manufacturers hired 53,000 workers last month as demand for factory products remained strong. Additionally, government employment picked up.
In fact, the overall job additions in the first two months of this year were revised up, while the unemployment rate in March dropped to 6%, in line with estimates, as mentioned in a
Bloomberg article. Moreover, a better measurement of unemployment – U6 rate – dropped to 10.7% from 11.1%, the MarketWatch article added. The U6 rate had touched a record 22.9% last April when the coronavirus pandemic ravaged the economy. How to Play the Strength in the Labor Market?
No doubt, the labor market has added jobs at a strong clip so far this year and is also well-poised to strengthen in the near future along with the economy. Thus, investing in sound staffing stocks at the moment seems prudent since they are direct beneficiaries of job additions.
It’s also judicious to invest in stocks from the aforesaid areas where jobs have been added. After all, job gains indicate that such areas are recuperating from the drubbing they took due to the pandemic. We have, thus, selected five stocks that possess a Zacks Rank #1 (Strong Buy) or 2 (Buy).
Cross Country Healthcare, Inc. ( CCRN Quick Quote CCRN - Free Report) is a national leader in providing innovative healthcare workforce solutions and staffing services. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has moved 116.1% up over the past 60 days. The company’s expected earnings growth rate for the current year is 45.7%. Kforce, Inc. ( KFRC Quick Quote KFRC - Free Report) is a full-service, web-based specialty staffing firm providing flexible and permanent staffing solutions for organizations. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has advanced 7.2% over the past 60 days. The company’s expected earnings growth rate for the current year is 8.4%. Darden Restaurants, Inc. ( DRI Quick Quote DRI - Free Report) is one of the largest casual dining restaurant operators worldwide. The company has operations in the United States and Canada with more than 1,700 restaurants. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has climbed 20.7% over the past 60 days. The company’s expected earnings growth rate for the current year is 24.9%. You can see the complete list of today’s Zacks #1 Rank stocks here. KB Home ( KBH Quick Quote KBH - Free Report) is a well-known homebuilder in the United States and one of the largest in the state. The company currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has moved 7.1% north over the past 60 days. The company’s expected earnings growth rate for the current year is 74.7%. Caterpillar Inc. ( CAT Quick Quote CAT - Free Report) is the largest global manufacturer of construction and mining equipment. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has moved 1.4% north over the past 60 days. The company’s expected earnings growth rate for the current year is 21%. Bitcoin, Like the Internet Itself, Could Change Everything
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