The pace of hiring is increasing rapidly in the United States, resulting in robust hiring across states and industries. The latest data from the Labor Department shows robust job gains in July. At the same time, the unemployment rate is declining.
This definitely is a positive sign amid fears of the economy slipping into recession. The solid July jobs data also proves that there are ample opportunities in the market and employers are on a hiring spree in a bid to enhance production levels. Given this scenario, staffing firms like Insperity, Inc. NSP, Cross Country Healthcare, Inc. CCRN, Resources Connection, Inc. RGP and Kelly Services, Inc. KELYA are likely to benefit in the near term.
Solid Job Gains in July
The Labor Department said on Aug 5 that the United States added a whopping 528,000 jobs in July, toppling economists’ expectations of a rise of just 250,000. This shows the underlying strength of the economy in the face of softening economy and soaring inflation.
This comes after 398,000 job additions in June. The U.S. economy has not fulfilled all the jobs that were lost after the COVID-19 outbreak. In March and April 2020, employers across the United States slashed 22 million jobs.
However, there are still millions of positions vacant, and employers are aggressively trying to fill them up. The job gains have surprised economists as several companies recently announced that they would go for job cuts, anticipating a slowdown in the coming months.
The U.S. economy shrank in the first two quarters of the year, which many define as a recession. However, a strong job market, believe many economists, is the reason that has prevented the economy from slipping into recession.
Job Growth Across Industries
July job gains were widespread. The maximum job additions of 96,000 were witnessed in the leisure and hospitality business. However, the industry still has 1.2 million vacancies to be fulfilled.
Professional and business services added 89,000 new heads, while restaurants and bars added 74,000 jobs. Factories added 30,000 jobs. The health care sector saw 70,000 new job additions, while government payrolls jumped 57,000. The retail sector also added 22,000 jobs.
Construction companies, which have seen a decline in demand for homes owing to the rising interest rates, also added new jobs.
This comes as the unemployment rate fell to 3.5% in July from 3.6% in June. July’s unemployment rate now matches the lowest level since 1969.
Moreover, wages jumped in July as average hourly earnings increased 0.5% month over month and 5.2% year over year to $32.27.
The rise in hourly wages adds fuel to the already soaring inflationary pressure and rising costs. However, more jobs and higher wages at the same time mean greater purchasing power. This will help people amid rising costs.
Jobs growth is expected to continue in the coming months as millions of positions remain vacant in the United States.
Stocks to Watch
Investing in staffing stocks appears lucrative in the current situation.
Insperity, Inc. provides an array of human resources and business solutions designed to help improve business performance. Since its formation in 1986, NSP has evolved from being solely a professional employer organization to a comprehensive business performance solutions provider. Insperity offers its most comprehensive HR services offerings through its Workforce Optimization and Workforce Synchronization solutions.
Insperity’s expected earnings growth rate for the current year is 25.3%. The Zacks Consensus Estimate for current-year earnings has improved 4.2% over the past 60 days. NSP has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cross Country Healthcare, Inc. is a national leader in providing innovative healthcare workforce solutions and staffing services. CCRN’s diverse client base includes both clinical and nonclinical settings, servicing acute care hospitals, physician practice groups, outpatient and ambulatory-care centers, nursing facilities, both public schools and charter schools, rehabilitation and sports medicine clinics, government facilities, and homecare. Cross Country Healthcare is able to place clinicians on travel and per diem assignments, local short-term contracts and permanent positions.
Cross Country Healthcare’s expected earnings growth rate for the current year is 54.3%. The Zacks Consensus Estimate for current-year earnings has improved 3.3% over the past 60 days. CCRN has a Zacks Rank #3 (Hold).
Resources Connection, Inc. is a multinational professional services firm that helps business leaders execute internal initiatives. RGP provides experienced accounting and finance, human resources management and information technology professionals to clients on a project-by-project basis.
Resources Connection’s expected earnings growth rate for next year is 5.8%. Shares of RGP have gained 24.2% in the past three months. RGP has a Zacks Rank #2.
Kelly Services, Inc. is a global leader in providing workforce solutions. KELYA and its subsidiaries, offer a comprehensive array of outsourcing and consulting services as well as world-class staffing on a temporary, temporary-to-hire, and direct-hire basis. Kelly Services provides temporary office clerical, marketing, professional, technical, light industrial, home care services, management services and other business services to a diversified group of customers.
Kelly Services’ expected earnings growth rate for the current year is 21.2%. The Zacks Consensus Estimate for current-year earnings has improved 0.5% over the past 60 days. KELYA has a Zacks Rank #3.
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