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4 Staffing Stocks to Buy on Steady Job Additions in U.S.

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After months of joblessness resulting from the COVID-19 outbreak two years back, vacancies are being filled at a steady pace over the past few months. Despite a huge number of vacancies, companies struggled to fill vacancies until recently.

However, things appear to be changing now that the fiscal stimulus has expired and people are once again returning to work. The unemployment rate has been steadily declining and staffing firms are busy helping companies to recruit. Given this scenario, stocks like Kforce Inc. (KFRC - Free Report) , Resources Connection, Inc. (RGP - Free Report) , KornFerry International (KFY - Free Report) and Cross Country Healthcare, Inc. (CCRN - Free Report) are likely to benefit in the near term.

U.S. Continues to Add More Jobs

The Labor Department said on May 6 that the United States added 428,000 nonfarm payrolls in April, exceeding expectations of 400,000. The April figures are also quite close to the figures recorded during the pre-pandemic era. The Labor Department also said that the wage pressure has started to ease.

April’s jump came after a record 678,000 jobs were added in February. Moreover, average hourly earnings grew 0.3% despite soaring inflation. On a year-over-year basis, wages continued to grow at the rate of 5.5% in April, unchanged from March.  

Last year, the job market had somewhat stalled due to an increase in cases of the Omicron variant of coronavirus, which kept many people out of work. Things are finally changing, and as the economy recovers, more jobs are being created.

Also, the government's fiscal stimulus to combat the COVID-19 pandemic, which gave people more purchasing power at the time, is long gone, and many are getting ready to return to work.

This has also seen the unemployment level decline steadily. The unemployment level held steady at 3.6% in April, which once again proves that the economy is on track for a steady recovery.

Signs of Economic Growth

April’s job gain once again shows that the economy is recovering at a fast pace despite inflationary pressures. According to the report, job growth was widespread. Manufacturing, hospitality and transportation and warehousing led the majority of the job additions in April. Other sectors too put up an impressive show.

The leisure and hospitality sector, which took a massive hit during the peak of the pandemic, added 78,000 jobs, with the unemployment rate for the sector declining 4.8%. This is the lowest rate since September 2019 after surging 39.3% in April 2020, a month after the pandemic struck.

The manufacturing sector added 55,000 jobs, while transportation and warehousing gained 52,000 jobs. The retail sector, which is yet to get back on its feet also saw an addition of 29,000 jobs, while the financial activities and healthcare sector added 35,000 and 34,000 jobs.

However, the pace of job additions has only picked up in recent times. Prior to the pandemic, employment was at an all-time high. Then came the COVID-19 epidemic, which resulted in the loss of millions of jobs and the furloughing of others. Despite the fact that the unemployment rate is declining, labor scarcity persists.

April’s job growth comes with the United States witnessing the worst quarter since the coronavirus outbreak, with the GDP falling 1.4%. However, job gains are on the rise. There are millions of job vacancies in the United States, likely to be filled up in the coming months.

Our Choices

Given this situation, it makes for an ideal opportunity to invest in staffing stocks. We have handpicked four such stocks that carry a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Kforce Inc. and its subsidiaries provide professional staffing services and solutions to clients on both a temporary and permanent basis through its Technology and Finance, and Accounting segments. KFRC’s Tech Segment provides both Flex and Direct Hire services to clients, focusing primarily on areas of information technology such as systems/applications architecture and development, data management, business and artificial intelligence, machine learning and network architecture and security. Kforce Inc.’s FA segment provides both Flex and Direct Hire services to clients in areas such as accounting, transactional finance, financial analysis and reporting, taxation, budgeting, loan servicing, professional administration, audit services and systems and controls analysis and documentation.

Kforce’s expected earnings growth rate for the current year is 24%. The Zacks Consensus Estimate for current-year earnings has improved 3.8% over the past 60 days. KFRC has a Zacks Rank #2.

Resources Connection, Inc. is a multinational professional services firm that helps business leaders execute internal initiatives. RGP provides experienced accounting and finance, human resources management and information technology professionals to clients on a project-by-project basis. Partnering with business leaders, Resources Connection drives internal change across each part of a global enterprise — accounting, finance, risk management and internal audit, corporate advisory, strategic communications and restructuring, information management, human capital, supply chain management, healthcare solutions, and legal and regulatory services.

Resources Connection’s expected earnings growth rate for the current year is 20%. The Zacks Consensus Estimate for current-year earnings has improved 5.4% over the past 60 days. Resources Connection sports a Zacks Rank #1.

KornFerry International is the world's leading and largest executive recruitment firm with the broadest global presence in the executive recruitment industry. KFY provides executive recruitment services exclusively on a retained basis and serves the global recruitment needs of our clients from middle to executive management. KornFerry International’sclients are many of the world's largest and most prestigious public and private companies, middle-market and emerging growth companies as well as governmental and not-for-profit organizations.

KornFerry International’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 5.5% over the past 60 days. KFY sports a Zacks Rank #1.

Cross Country Healthcare, Inc. is a national leader in providing innovative healthcare workforce solutions and staffing services. CCRN’s diverse client base includes both clinical and nonclinical settings, servicing acute care hospitals, physician practice groups, outpatient and ambulatory-care centers, nursing facilities, both public schools and charter schools, rehabilitation and sports medicine clinics, government facilities, and homecare. Cross Country Healthcare is able to place clinicians on travel and per diem assignments, local short-term contracts and permanent positions.

Cross Country Healthcare’s expected earnings growth rate for the current year is 35.3%. The Zacks Consensus Estimate for current-year earnings has improved 66.3% over the past 60 days. CCRN has a Zacks Rank #1.