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U.S. Labor Market Remains Robust: 4 Top Staffing Picks
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Official non-farm payroll data for April provides fresh evidence that the labor market is on a strong footing. Since the beginning of this year, the U.S. labor market remains firm buoyed by strong job additions and record-low unemployment level.
Healthy non-farm payrolls data for April along with continuing decline in the weekly jobless claims is a clear indication of the employers’ intentions to continue recruiting. Notably, strong business confidence is likely to aid the enterprises in recruiting more manpower. Consequently, good staffing stocks are lucrative investment options at the moment.
Labor Market Momentum Continues
The U.S. economy added 164,000 jobs in April. During 2018, job additions have registered an average pace of 200,000 jobs per month, higher than last year’s average pace of 182,000. The unemployment rate declined from 4.1% in March to 3.9% in April, the lowest level in nearly 18 years. This pace is also marginally higher than the Fed’s targeted rate of 3.8%. This is the first time in six months that the unemployment rate has undergone a decline. (Read more: Unemployment Falls to Near 18-Year Low: 6 Winning Picks)
Moreover, on May 3, the U.S. Labor Department data revealed that weekly jobless claims rose modestly by 2,000 to a seasonally adjusted 211,000 for the week ended Apr 28. More significantly, U.S. citizens receiving unemployment aid fell to its lowest level since 1973. This was the 165th consecutive week that the number of Americans filing for unemployment benefits remained below the 300,000 threshold.
Business Confidence Remains Healthy
On May 3, the Commerce Department reported that the U.S. factory orders for the month of March grew at 1.6%. The increase in March marked the seventh rise in the past eight months. This indicates that the U.S. manufacturing sector, which constitutes around 12% of its GDP, is increasing capital spending on the back of massive tax overhaul, deregulatory measures and strong domestic & global economy. (Read more: U.S. Factory Orders Remain Strong in March: 5 Top Picks)
Meanwhile, the ISM Manufacturing Index came in at 59.3% with 17 of the 18 manufacturing industries registered growth. Any reading above 50 means the manufacturing sector is expanding. The March PMI figure also marks overall economic growth for the 107th consecutive month.
Our Choices
Many economists are of the opinion that investment growth is likely to pick up in the near term and they expect the unemployment rate to undergo further decline. Consequently, adding staffing stocks to your portfolios makes great sense at this point.
The buoyancy in the staffing space is further confirmed by its solid Zacks Industry Rank in the top 40% (103 out of 256), indicating continued hiring and more job opportunities. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1.
We narrowed down our choices to four stocks with strong growth potential carrying either Zacks Rank #1 (Strong Buy) or 2 (Buy).
Chart below shows price performnace of our four picks year to date.
Heidrick & Struggles International Inc. (HSII - Free Report) serves the executive talent and leadership needs of the world's top organizations as the premier provider of leadership consulting, culture shaping and senior-level executive search services.
Heidrick & Struggles has expected earnings growth of 66.1% for current year. The Zacks Consensus Estimate for the current year has improved by 17.5% over the last 60 days. The company sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Kforce Inc. (KFRC - Free Report) is a full-service, web-based specialty staffing firm providing flexible and permanent staffing solutions for organizations and career management for individuals. The stock carries a Zacks Rank #2.
Kforce has expected earnings growth of 40.1% for current year. The Zacks Consensus Estimate for the current year has improved by 3.3% over the last 60 days.
Korn/Ferry International (KFY - Free Report) is the world's leading and largest executive recruitment firm with the broadest global presence in the executive recruitment industry. It carries a Zacks Rank #2.
Korn/Ferry International has expected earnings growth of 17.4% for current year. The Zacks Consensus Estimate for the current year has improved by 1.5% over the last 60 days.
Robert Half International Inc. (RHI - Free Report) is the world's first and largest specialized staffing firm. Robert Half has helped clients and job candidates find the right fit for their staffing or employment needs. The stock carries a Zacks Rank #2.
Robert Half International has expected earnings growth of 29.6% for current year. The Zacks Consensus Estimate for the current year has improved by 4.3% over the last 60 days.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
U.S. Labor Market Remains Robust: 4 Top Staffing Picks
Official non-farm payroll data for April provides fresh evidence that the labor market is on a strong footing. Since the beginning of this year, the U.S. labor market remains firm buoyed by strong job additions and record-low unemployment level.
Healthy non-farm payrolls data for April along with continuing decline in the weekly jobless claims is a clear indication of the employers’ intentions to continue recruiting. Notably, strong business confidence is likely to aid the enterprises in recruiting more manpower. Consequently, good staffing stocks are lucrative investment options at the moment.
Labor Market Momentum Continues
The U.S. economy added 164,000 jobs in April. During 2018, job additions have registered an average pace of 200,000 jobs per month, higher than last year’s average pace of 182,000. The unemployment rate declined from 4.1% in March to 3.9% in April, the lowest level in nearly 18 years. This pace is also marginally higher than the Fed’s targeted rate of 3.8%. This is the first time in six months that the unemployment rate has undergone a decline. (Read more: Unemployment Falls to Near 18-Year Low: 6 Winning Picks)
Moreover, on May 3, the U.S. Labor Department data revealed that weekly jobless claims rose modestly by 2,000 to a seasonally adjusted 211,000 for the week ended Apr 28. More significantly, U.S. citizens receiving unemployment aid fell to its lowest level since 1973. This was the 165th consecutive week that the number of Americans filing for unemployment benefits remained below the 300,000 threshold.
Business Confidence Remains Healthy
On May 3, the Commerce Department reported that the U.S. factory orders for the month of March grew at 1.6%. The increase in March marked the seventh rise in the past eight months. This indicates that the U.S. manufacturing sector, which constitutes around 12% of its GDP, is increasing capital spending on the back of massive tax overhaul, deregulatory measures and strong domestic & global economy. (Read more: U.S. Factory Orders Remain Strong in March: 5 Top Picks)
Meanwhile, the ISM Manufacturing Index came in at 59.3% with 17 of the 18 manufacturing industries registered growth. Any reading above 50 means the manufacturing sector is expanding. The March PMI figure also marks overall economic growth for the 107th consecutive month.
Our Choices
Many economists are of the opinion that investment growth is likely to pick up in the near term and they expect the unemployment rate to undergo further decline. Consequently, adding staffing stocks to your portfolios makes great sense at this point.
The buoyancy in the staffing space is further confirmed by its solid Zacks Industry Rank in the top 40% (103 out of 256), indicating continued hiring and more job opportunities. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1.
We narrowed down our choices to four stocks with strong growth potential carrying either Zacks Rank #1 (Strong Buy) or 2 (Buy).
Chart below shows price performnace of our four picks year to date.
Heidrick & Struggles International Inc. (HSII - Free Report) serves the executive talent and leadership needs of the world's top organizations as the premier provider of leadership consulting, culture shaping and senior-level executive search services.
Heidrick & Struggles has expected earnings growth of 66.1% for current year. The Zacks Consensus Estimate for the current year has improved by 17.5% over the last 60 days. The company sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Kforce Inc. (KFRC - Free Report) is a full-service, web-based specialty staffing firm providing flexible and permanent staffing solutions for organizations and career management for individuals. The stock carries a Zacks Rank #2.
Kforce has expected earnings growth of 40.1% for current year. The Zacks Consensus Estimate for the current year has improved by 3.3% over the last 60 days.
Korn/Ferry International (KFY - Free Report) is the world's leading and largest executive recruitment firm with the broadest global presence in the executive recruitment industry. It carries a Zacks Rank #2.
Korn/Ferry International has expected earnings growth of 17.4% for current year. The Zacks Consensus Estimate for the current year has improved by 1.5% over the last 60 days.
Robert Half International Inc. (RHI - Free Report) is the world's first and largest specialized staffing firm. Robert Half has helped clients and job candidates find the right fit for their staffing or employment needs. The stock carries a Zacks Rank #2.
Robert Half International has expected earnings growth of 29.6% for current year. The Zacks Consensus Estimate for the current year has improved by 4.3% over the last 60 days.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>