Employment in the United States jumped more than expected in August with blue and white collar industries adding adequate jobs. Notably, jobs were added in professional and business services, healthcare, transportation and warehousing, wholesale trade and mining.
The country’s job market remained optimistic despite President Donald Trump’s protectionist trade policies resulting in uncertainties. Employers shrugged off trade war tensions and went on a hiring spree, making the backdrop favorable for staffing companies.
Employment Data Fared Better Than Expected
A survey by Reuters had projected non-farm payroll employment to increase by 191,000 jobs in August but the data released by Bureau of Labor Statistics shows 201,000 job additions in the month.
The surge in non-farm payroll jobs last month was on par with the average monthly gain of 196,000 over a year.
More Vacancies and Fewer Skilled Workers to Boost Hiring
The modest rise in average hourly earnings is the result of a tight labor market, as employers raised pays to retain workers. As the available jobs were more than job seekers, employers had to raise wages. Growth in wage has been the highest since April 2009, per a CNBC report.
Strong U.S. economic growth and positive perception of the job market drove many Americans to quit their jobs for greener pastures. The U.S. Labor Department reported about 3.4 million Americans quitting their jobs in June with the confidence that they will find a better-paying job.
The availability of fewer skilled workers in the labor market led employers to either open their doors to unskilled, inadequately trained job aspirants or increase wages to retain their experienced staff. This is what is leading to increased demand for staffing solutions.
Strong Trend in Recruitment
The United States witnessed job gains for 95 months straight in August with the job market adding more white collar jobs than blue collar ones. Professional and business services contributed most to the industry last month, adding 53,000 jobs. Healthcare added 33,000 jobs followed by an addition of 23,000 jobs in construction; 22,000 in wholesale trade; 20,000 in transportation and warehousing and 6,000 in mining.
There was little change in the employment scenario in manufacturing, retail trade, financial activities, information, government, leisure and hospitality over the month.
5 Staffing Stocks to Buy
The current trend in hiring is favorable for staffing companies.
The Conference Board’s Employment Trends Index stood at 110.9 in August, up from 109.6 in July. The index jumped 6.8% year over year last month.
Addressing the annualized jump in the Conference Board’s Employment Trends Index to 110.9 in August (up from 109.6 in July), Gad Levanon, the Board’s Chief Economist, North America, said, “The Employment Trends Index continues to accelerate, with this month’s year-over-year increase being the strongest since May 2012. This supports our projections for strong economic growth in the coming year, suggesting that demand for labor is likely to remain strong.”
Overall, a strong domestic economy, higher government spending, strong U.S. gross domestic product growth and Trump administration’s business-friendly economic policies should continue to boost job growth.
We have, therefore, hand-picked five staffing stocks that either carry a Zacks Rank #1 (Strong Buy) or 2 (Buy). All the stocks have witnessed good year-to-date growth.
Heidrick & Struggles International, Inc. (HSII - Free Report) is one of the leading executive search firms worldwide. Their business centers are spread across North America, Latin America, Asia Pacific and Europe. The Zacks Rank #1 company’s shares have gained 64.8% year to date.
KForce, Inc. (KFRC - Free Report) is a web-based staffing firm that provides recruitment solutions in areas of information technology, healthcare, human resources, pharmaceuticals and engineering among others. KForce carries a Zacks Rank #2 and its shares have climbed 60% year to date.
Headquartered in Kingwood, TX, Insperity, Inc. (NSP - Free Report) provides solutions in areas of human resources and business. The company carries a Zacks Rank #2 and its shares have gained 107.5% since the beginning of 2018.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Robert Half International Inc. (RHI - Free Report) is the world’s first and largest specialized staffing firm. The company provides specialized staffing and risk consulting services. Robert Half International carries a Zacks Rank #2 and its stock price has gained 30.3% since the beginning of this year.
BG Staffing Inc. (BGSF - Free Report) provides temporary staffing solutions for various industries across the United States. Currently, it covers temporary staffing requirements in commercial, professional and multi-family sectors. BG Staffing has a Zacks Rank #2 and its shares have gained 60% year to date.
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