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4 Stocks to Gain as U.S. Job Market Remains on Solid Footing
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The U.S. economy quite successfully churned out jobs in April despite the Federal Reserve’s policies to cool the economy. The U.S. labor market showed resilience amid the ongoing banking crisis and elevated inflation.
The Labor Department added that nonfarm payrolls increased by 253,000 last month, the best gain since January, and easily surpassed analysts’ estimate of growth of 180,000.
Hiring in April, in reality, was robust and reversed a cooling trend that had marked the first three months of the year. Job gains were primarily strong in professional and business services, healthcare, leisure, and hospitality, to name a few.
While employers in the United States added 43,000 jobs in the professional and services field, healthcare saw 40,000 job gains. That was followed by 31,000 job additions in the leisure and hospitality field.
What’s more, 23,000 jobs were added in the troubled banking industry. Let us not forget that the Silicon Valley Bank collapsed due to run-on deposits, and it led to a contagion effect, which in due course impacted banks such as Signature Bank and First Republic Bank.
Government hiring also increased by 23,000. Overall, hiring was much stronger in areas that had earlier faced labor shortages than rate-sensitive areas, including manufacturing and retail.
Hiring in April bounced back from downwardly revised job additions in March and February. Employers added fewer jobs in the previous months amid moderate economic growth.
In the first quarter, gross domestic product (GDP) advanced at an annualized pace of 1.1%, less than economists’ estimate of growth of 2%. This is also less than the 2.6% annualized growth in the fourth quarter of last year.
Nonetheless, the unemployment rate came in at 3.4% in April, down from March’s 3.5%, and matched the lowest reading since 1969, added the Labor Department. The jobless rate for Blacks, Hispanics, and Asians all declined.
Now, with employers adding jobs at a strong clip in April, and reversing a cooling trend, shares of staffing companies are undoubtedly poised to gain. This is because staffing players are the direct beneficiaries of job additions.
Additionally, the leading indicator of future employment growth increased in April, something that bodes well for staffing stock as well. The Employment Trends Index of the Conference Board increased to 116.18 in April, up from March’s downwardly revised 115.51. Thus, we have highlighted four staffing stocks that are worth a look now.
Kforce (KFRC - Free Report) provides professional staffing services and solutions to clients on both a temporary and permanent basis through the Technology Finance and Accounting segments.
KFRC, currently, has a Zacks Rank #3 (Hold). The company’s expected earnings growth rate for next year is 11.5%. KFRC’s shares have already gained 19.8% in the past five-year period. You can see the complete list of today’s Zacks #1 Rank stocks here.
Robert Half International (RHI - Free Report) is one of the world's largest providers of professional consulting and staffing services.
RHI, currently, has a Zacks Rank #3. The company’s expected earnings growth rate for next year is 17.8%. RHI’s shares have already gained 15.1% in the past five years.
Staffing 360 Solutions (STAF - Free Report) is engaged in a global buy-and-build strategy through the acquisition of staffing organizations in the United States.
STAF, currently, has a Zacks Rank #3. The company’s expected earnings growth rate for the current quarter is 121.1%. STAF’s expected earnings growth rate for the next quarter is nearly 114%.
Kelly Services (KELYA - Free Report) is a global leader in providing workforce solutions. It has offices located in major cities in the United States.
KELYA, currently, has a Zacks Rank #3. The company’s expected earnings growth rate for the current and next year are 3.8% and 37.7%, respectively. KELYA’s shares are likely to gain 13% in the next five-year period.
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4 Stocks to Gain as U.S. Job Market Remains on Solid Footing
The U.S. economy quite successfully churned out jobs in April despite the Federal Reserve’s policies to cool the economy. The U.S. labor market showed resilience amid the ongoing banking crisis and elevated inflation.
The Labor Department added that nonfarm payrolls increased by 253,000 last month, the best gain since January, and easily surpassed analysts’ estimate of growth of 180,000.
Hiring in April, in reality, was robust and reversed a cooling trend that had marked the first three months of the year. Job gains were primarily strong in professional and business services, healthcare, leisure, and hospitality, to name a few.
While employers in the United States added 43,000 jobs in the professional and services field, healthcare saw 40,000 job gains. That was followed by 31,000 job additions in the leisure and hospitality field.
What’s more, 23,000 jobs were added in the troubled banking industry. Let us not forget that the Silicon Valley Bank collapsed due to run-on deposits, and it led to a contagion effect, which in due course impacted banks such as Signature Bank and First Republic Bank.
Government hiring also increased by 23,000. Overall, hiring was much stronger in areas that had earlier faced labor shortages than rate-sensitive areas, including manufacturing and retail.
Hiring in April bounced back from downwardly revised job additions in March and February. Employers added fewer jobs in the previous months amid moderate economic growth.
In the first quarter, gross domestic product (GDP) advanced at an annualized pace of 1.1%, less than economists’ estimate of growth of 2%. This is also less than the 2.6% annualized growth in the fourth quarter of last year.
Nonetheless, the unemployment rate came in at 3.4% in April, down from March’s 3.5%, and matched the lowest reading since 1969, added the Labor Department. The jobless rate for Blacks, Hispanics, and Asians all declined.
Now, with employers adding jobs at a strong clip in April, and reversing a cooling trend, shares of staffing companies are undoubtedly poised to gain. This is because staffing players are the direct beneficiaries of job additions.
Additionally, the leading indicator of future employment growth increased in April, something that bodes well for staffing stock as well. The Employment Trends Index of the Conference Board increased to 116.18 in April, up from March’s downwardly revised 115.51. Thus, we have highlighted four staffing stocks that are worth a look now.
Kforce (KFRC - Free Report) provides professional staffing services and solutions to clients on both a temporary and permanent basis through the Technology Finance and Accounting segments.
KFRC, currently, has a Zacks Rank #3 (Hold). The company’s expected earnings growth rate for next year is 11.5%. KFRC’s shares have already gained 19.8% in the past five-year period. You can see the complete list of today’s Zacks #1 Rank stocks here.
Robert Half International (RHI - Free Report) is one of the world's largest providers of professional consulting and staffing services.
RHI, currently, has a Zacks Rank #3. The company’s expected earnings growth rate for next year is 17.8%. RHI’s shares have already gained 15.1% in the past five years.
Staffing 360 Solutions (STAF - Free Report) is engaged in a global buy-and-build strategy through the acquisition of staffing organizations in the United States.
STAF, currently, has a Zacks Rank #3. The company’s expected earnings growth rate for the current quarter is 121.1%. STAF’s expected earnings growth rate for the next quarter is nearly 114%.
Kelly Services (KELYA - Free Report) is a global leader in providing workforce solutions. It has offices located in major cities in the United States.
KELYA, currently, has a Zacks Rank #3. The company’s expected earnings growth rate for the current and next year are 3.8% and 37.7%, respectively. KELYA’s shares are likely to gain 13% in the next five-year period.