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Here's How to Play May's Stunning Jobs Report

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May’s jobs data came as a big surprise for many economists. A mind-boggling 2.5 million U.S. jobs were regained in May, in contrast to several economists’ forecast of a loss of 7.25 million jobs. The apprehensions were mainly backed by an array of applications for jobless insurance and millions of Americans remaining on benefit rolls. 
 
However, economists lost the plot as they failed to take into account the Trump administration’s relief response, in particular, the Paycheck Protection Program that provided organizations the necessary funding to keep their workers.
 
At the same time, the collapse of the labor market has come to an end as more people return to work. Lest we forget, businesses were shut down and lockdown measures were imposed to curb the spread of coronavirus that ravaged economic growth worldwide, let alone the United States.
 
Notably, the unemployment rate came in at 13.3%, whereas economists anticipated the jobless rate at 19% versus April's 14.7%. Hence, America’s economy defied predictions for a Depression-scenario jump in jobless rate, indicating that the economy is going from strength to strength amid reopening measures and government’s stimulus initiatives.
 
The job numbers despite being astounding were pleasant enough for the White House to effectively claim victory over the economic as well as health crisis. Praising the U.S. jobs report, President Trump said that this is the “greatest comeback in American history.”
 
Nonetheless, the obvious thing that would cross an investor’s mind is how to trade May’s surprising jobs gain. Let’s take a look at the avenues – 
 
Sectors That Lead the Way in Hiring
 
By and large, the jobs report showed that many of the industries added jobs. But the biggest gains came from leisure and hospitality, where 1.2 million Americans were rehired. This is followed by 464,000, 424,000 and 368,000 job gain in construction, education and health services, and retail, respectively.
 
Layoffs in these industries rose due to lockdown measures. However, not surprisingly, the industries saw job gains as the economy started to reopen.
 
And with hiring picking up in these industries, it’s no doubt that they got a new lease of life and will surely do well going forward. Thus, investing in the same seems prudent as of now. Some of the stocks that an investor can consider are RCI Hospitality Holdings, Inc. (RICK - Free Report) , Great Lakes Dredge & Dock Corporation (GLDD - Free Report) , CoDiagnostics, Inc. (CODX - Free Report) and Sportsman's Warehouse Holdings, Inc. (SPWH - Free Report) .
 
RCI Hospitality operates restaurants and bars. The company has a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for its current-year earnings has risen more than 100% over the past 30 days. The company’s expected earnings growth rate for the next quarter and year is 10.4% and 140.6%, respectively.
 
Great Lakes Dredge & Dock provides dredging services in the United States. The company has a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for its current-year earnings has climbed 23.3% over the past 60 days. The company’s expected earnings growth rate for the next quarter and current year is 21.4% and 23.3%, respectively. You can see the complete list of today’s Zacks #1 Rank stocks here.
 
CoDiagnostics is a molecular diagnostics company that intends to manufacture and sell reagents used for diagnostic tests. The company has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has risen more than 100% over the past 60 days. The company’s expected earnings growth rate for the current and next quarter is 862.5% and 770%, respectively.
 
Sportsman's Warehouse operates as an outdoor sporting goods retailer in the United States. The company has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has moved 4.7% up over the past 60 days. The company’s expected earnings growth rate for the current quarter and year is 30.8% and 42.6%, respectively.
 
Staffing Stocks to Make the Most
 
Quite obviously, the latest job additions bode well for staffing companies. Hence, given the buoyancy in the staffing space, investors can bet on Resources Connection, Inc. (RGP - Free Report) .
 
The Zacks Rank #2 company provides consulting services. The Zacks Consensus Estimate for its current-year earnings has moved 3.1% north over the past 90 days. The company’s shares have gained a superb 10.8% over the past five-year period.
 
5 Stocks Set to Double
 
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
 
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.