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4 Staffing Stocks to Watch on Robust January Job Additions

The Fed aggressively hiked interest rates in 2022 and will continue with its policy this year, too, as the fight to control multi-year high inflation continues. This has raised concerns over the health of the nation’s economy, as many now fear the economy might slip into a recession in the coming months.

However, despite growing inflationary pressures, which have compelled people to spend cautiously, the labor market is still going strong. The labor market remained resilient in 2022 and the trend has continued into this year too. This has been helping staffing companies during these trying times. Given this situation, staffing firms like Kforce Inc., KFRC Cross Country Healthcare, Inc. CCRN HireQuest, Inc. HQI and ManpowerGroup Inc. MAN are likely to benefit in the near term.

Solid Job Additions Continue

After robust job additions in December, nonfarm payrolls once again surged in January. The Labor Department said that nonfarm payrolls surged a solid 517,000, beating analysts’ expectations of a jump of a meager 187,000. This follows job gains of 260,000 in December.

While inflation continued to show signs of easing, January proved to be a great month for the labor market, with the figures coming in above the average monthly gain of 401,000 recorded last year.

The enormous beat against the estimate was made possible by growth in a wide range of industries. Leisure and hospitality topped the list, with 128,000 job additions, followed by professional and business services, government and healthcare sectors, which added 82,000, 74,000 and 58,000 jobs, respectively.

The solid jump in January came, although several tech companies announced layoffs but job openings still remain high.

According to the Labor Department, employers posted 11 million job openings in December, the highest since July and an unexpected rise from 10.4 million in November. Also, more Americans entered the labor market in January. The labor force participation, or the proportion of adults looking for jobs or already having a job, increased to 62.4% in January, the highest level since March 2022.

Understandably there are still millions of jobs available as the Labor Department’s count of layoffs amounted to less than 1.5 million for 21 straight months.

Also, the January jobs report came as the unemployment rate fell to 3.4%, its lowest level since 1969.

With jobs being added at an aggressive pace amid waning fears of an economic slowdown, staffing companies stand to benefit the most.

Stocks to Watch

Given this situation, investors should keep a tab on staffing stocks, four of which have been discussed below.

Kforce Inc. and its subsidiaries provide professional staffing services and solutions to clients on both a temporary and permanent basis through its Technology and Finance, and Accounting segments. KFRC’s Tech Segment provides both Flex and Direct Hire services to clients, focusing primarily on areas of information technology such as systems/applications architecture and development, data management, business and artificial intelligence, machine learning and network architecture and security.

Kforce’s expected earnings growth rate for next year is 24.9%. The Zacks Consensus Estimate for current-year earnings has improved 7.6% over the past 60 days. KFRC has a Zacks Rank #1 (Strong 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 65.7%. Shares of CCRN have gained 17% in the past six months. Cross Country Healthcare has a Zacks Rank #3 (Hold).

HireQuest, Inc. provides temporary staffing services, which include general labor, and industrial and construction personnel. HQI serves primarily in the areas of construction, light industrial, manufacturing, hospitality and event services.

HireQuest’s expected earnings growth rate for the current year is 33.3%. Shares of HQI have gained 62.4% in the past six months. HireQuest sports a Zacks Rank #1.

ManpowerGroup Inc. is one of the leading providers of innovative workforce solutions and services across the globe. MAN has a well-established network of 2,500 offices in 75 countries and territories. ManpowerGroup provides its wide range of staffing solutions as well as engagement and consulting services through its major brands — Manpower, ManpowerGroup Solutions and Experis.

ManpowerGroup’s expected earnings growth rate for next year is 20.1%. Shares of MAN have gained 15.8% in the past six months. ManpowerGroup carries a Zacks Rank #3.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

ManpowerGroup Inc. (MAN) : Free Stock Analysis Report

Kforce, Inc. (KFRC) : Free Stock Analysis Report

Cross Country Healthcare, Inc. (CCRN) : Free Stock Analysis Report

HireQuest, Inc. (HQI) : Free Stock Analysis Report

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