The latest U.S. Labor Department data revealed that jobless claims for the week ended Sep 1 declined to a near 49-year low. The figure was 203,000, down 10,000 from the previous week’s unrevised level and came below Reuters' economist expectations of 214,000.
The four-week moving average that is considered a better measure of labor market trends, as it evens out the sharp fluctuations in weekly reports, declined 2,750 to 209,500. This figure also plunged to a 49-year low.
The average level of jobless claims continues to hover just above the 200,000 mark, which was last seen in the early 1970s.
Strong Labor Market Should Drive Economic Growth
While the economy continues to create new jobs despite the 18-year low jobless rate, a tight labor market is making employers reluctant to lay off workers. According to the ADP National Employment Report released yesterday, private payrolls surged 163,000 in August. Revised data for July show that private hiring rose 217,000 instead of 219,000 reported previously.
Record low jobless claims provide fresh signs of a sustained labor market strength that should continue to support economic growth.
U.S. GDP grew 4.2% in the second quarter, almost doubling from 2.2% increase witnessed in the first quarter and recording the strongest performance in four years. Strong consumer and government spending, business investment as well as a surge in exports drove economic growth.
So far, the economy appears to be shrugging off worries about Trump administration’s protectionist trade policy, which has led to a trade war.
The Fed forecasts 2018 GDP to rise 2.8% with 2.4% and 2% growth forecast for 2019 and 2020, respectively.
4 Solid Picks
Decline in weekly jobless claims and strong non-farm payrolls data for August indicate that employers will continue to recruit more people, especially as the economy remains remarkably strong. Consequently, it makes sense to invest in good staffing stocks to enrich one’s portfolio.
We have narrowed down our search to the following stocks, each of which has a Zacks Rank #1 (Strong Buy) or 2 (Buy) and a solid expected earnings growth rate for the year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Heidrick & Struggles International, Inc. (HSII - Free Report) is a provider of executive search, culture shaping, and leadership consulting services. It currently sports a Zacks Rank #1. The company expects earnings growth of 84.4% for the current year. The Zacks Consensus Estimate for the current year improved 11% in the last 60 days.
Heidrick & Struggles International, Inc. Revenue (TTM)
Robert Half International Inc. (RHI - Free Report) is one of the largest human resource consulting firms in the United States. It carries a Zacks Rank #2.The company’s expected earnings growth rate for the current year is 32.7%. The Zacks Consensus Estimate for the current year improved 2.3% in the last 60 days.
Robert Half International Inc. Revenue (TTM)
BG Staffing, Inc. (BGSF - Free Report) is a national provider of temporary staffing services across a diverse set of industries. It carries a Zacks Rank #2. The company’s expected earnings growth rate for the current year is 61.4%. The Zacks Consensus Estimate for the current year improved 19.9% in the last 60 days.
BG Staffing Inc Revenue (TTM)
Insperity Inc. (NSP - Free Report) , engaged in providing an array of human resources and business solutions, also carries a Zacks Rank #2. The company expects earnings growth of 43.7% for the current year. The Zacks Consensus Estimate for the current year improved 3.2% in the last 60 days.
Insperity, Inc. Revenue (TTM)
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