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5 Stocks to Gain From 49-Year Low Unemployment Rate

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The jobless rate dipped two-tenths of a percentage point to 3.7% in September and touched its lowest level in nearly 50 years. Further, the initial job counts for August and July were revised substantially upward.

The American economy is enjoying historical growth amid escalating trade tensions between the Republican administration and overseas countries, including China. This has added strength to corporate investments and made companies hire more aside from offering attractive pay packages.

Professional and business services led job gains, followed by healthcare, transportation and warehousing, construction, manufacturing and mining. With employability likely to grow in the coming months, picking stocks from these sectors would be prudent.

Joblessness Hits 49-Year Low, Employers on Hiring Spree

Per Friday’s Labor Department report, unemployment rated dipped to 3.7% in September, its lowest level since 1969. So far, the metric has seen a steady fall from the skyrocketed rate of 10% during the Great Recession.

Amid stagnant workforce participation, employers added 134,000 new jobs in September, marking the 96th straight month of employment gain. Job creation had got somewhat tempered due to Hurricane Florence but may soon bounce back with increased rebuilding requirements in the storm hit areas. Notably, job additions for August and July were revised upward by a combined 87,000. Average job addition for the last three months came in at 190,000.

At the forefront of job gains were healthcare, transportation and warehousing, construction, manufacturing, and mining industries, which added 26000, 24000, 23000, 18000 and 6000 jobs, respectively. However, leading the pack was professional and business services with 54000 new jobs. 

Wages Remain Upbeat, Economy Retains Strength 

U.S. companies are not only hiring more, but also recruiting with higher wages. The annual wage rate climbed 2.8% year over year in September. Especially, professional and business services, transportation and warehousing, construction, manufacturing and mining companies are paying better than other jobs. Average weekly earnings in September for professional and business services, transportation and warehousing, construction, manufacturing, and mining employees came in at $1,180.11, $951.49, $1,174, $1,104.46 and $1,509.57, respectively, higher than $939.78 for the private sector taken together.

Weathering all the tariff-related uproar, the U.S. economy grew 3.2% in the first half of 2018 and is currently powered to grow nearly 4% in the third quarter. The upside is primarily stoked by Trump’s GOP tax cuts and will likely continue to expedite business investments as well as spur job gains in the months ahead.

5 Hot Picks

The U.S. economy is in excellent shape and most businesses are likely to add up workers at a brisk pace. Below, we have handpicked five great stocks from selective industries that are steaming up and creating more jobs.

Our choices currently sport a Zacks Rank #1 (Strong Buy) and flaunt a VGM Score of A or B. You can see the complete list of today’s Zacks #1 Rank stocks here.

Steelcase Inc. (SCS - Free Report) produces and sells interior architectural products on the global forum.

Steelcase has a VGM Score of A. The company’s year-over-year expected earnings growth for 2018 is currently pegged at 24.2%. The Zacks Consensus Estimate for the current year has improved by 18.9% to $1.13 per share over the last 60 days. The stock has gained 23.8% in the past three months.

General Finance Corporation (GFN - Free Report) provides speciality rental services in North America and Asia-Pacific markets.

General Finance has a VGM Score of B and year-over-year expected earnings growth for 2018 of 283.3%. The Zacks Consensus Estimate for the current year has improved by 91.7% to 23 cents per share over the last 60 days. The stock has gained 11.6% in the past three months.

Matson, Inc. (MATX - Free Report) provides logistics and ocean transportation services.

Matson has a VGM Score of B. The company’s year-over-year expected earnings growth for 2018 is currently pegged at 32.6%. The Zacks Consensus Estimate for the current year has improved by 0.9% to $2.36 per share over the last 60 days. The stock has gained 1.8% in the past three months.

North American Construction Group Ltd. (NOA - Free Report) provides mining and heavy construction services in Canada.

North American Construction Group has a VGM Score of A. The company’s year-over-year expected earnings growth for 2018 is currently pegged at 235.7%. The Zacks Consensus Estimate for the current year has improved by 2.2% to 47 cents per share over the last 60 days. The stock has gained 94.8% in the past three months.

Zebra Technologies Corporation (ZBRA - Free Report) produces and sells data capture and automatic identification products globally.

Zebra Technologies has a VGM Score of B. Its year-over-year expected earnings growth for 2018 is currently pegged at 47.1%. The Zacks Consensus Estimate for the current year has improved by 4.5% to $10.37 per share over the last 60 days. The stock has gained 8.4% in the past three months.

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