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5 Staffing Stocks Set to Gain From Potential Fall in Jobless Rate

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The U.S. labor market has been in a sorry state since the COVID-19 pandemic broke out last year with millions losing their jobs from business shutdowns. Nonetheless, the situation has been improving lately and the unemployment rate is expected to fall this year. Notably, the U.S. Federal Reserve sees unemployment rate falling to 4.5% in 2021 from the previous FOMC forecast of 5% made in December, as mentioned in a CNBC article.

Moreover, the article stated that the forecast for the next two years is 4.2% and 3.7% before settling into a longer-run level of 4%. Such a situation is sure to benefit the staffing industry as it stands to be a direct beneficiary of the potential fall in unemployment.

Notably, the labor market did show some signs of improvement in February. Per a report by the U.S. Bureau of Labor Statistics, the unemployment rate fell to 6.2% in February and the total nonfarm payroll employment rose by 379,000 in February. The report stated that most of the job gains were in leisure and hospitality which added 355,000 jobs due to easing of pandemic-related restrictions in some parts of the country. Moreover, there were also smaller gains in temporary help services which added 53,000 jobs in February. Employment in health care and social assistance increased by 46,000 in February, while retail trade and manufacturing added 41,000 and 21,000 jobs, respectively.

Among the unemployed, the number of persons on temporary layoffs fell by 517,000 in February to 2.2 million. Even though the figure is 1.5 million higher on a year-over-year basis, it is considerably lower than the high of 18 million witnessed last April.

Meanwhile, both manufacturing and services sectors have been expanding steadily, highlighting that economic activities are resuming, and more people are receiving employment. Reflective of the situation, employment activity in both manufacturing and services sectors rose in February. Notably, the Institute for Supply Management reported that the Employment Index for manufacturing came in at 54.4% in February compared to 52.6% in January, marking the third successive month of expansion. Meanwhile, the Employment Index for services came in at 52.7% in February compared to 55.2% in January, expanding for the second successive month.

5 Top Staffing Firms to Buy

The U.S. labor market is gradually recovering after being hit by the pandemic last year as signaled by rising nonfarm payroll employments. Moreover, the Fed has predicted that the unemployment rate will fall going forward as the economy continues to rebound. Hence, this makes it a good time to invest in staffing firms that can make the most of this potential upswing. Notably, we have handpicked five such stocks that carry a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Korn Ferry KFY, together with its subsidiaries, provides organizational consulting services worldwide. The company currently has a Zacks Rank #1. The Zacks Consensus Estimate for its next-quarter earnings increased more than 100% over the past 60 days. The company’s expected earnings growth rate for the next quarter is more than 100%.

Kforce Inc. KFRC provides professional staffing services and solutions in the United States. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased 8.8% over the past 60 days. The company’s expected earnings growth rate for the current year is 8.4%.

Cross Country Healthcare, Inc. CCRN provides talent management and other consultative services for healthcare clients in the United States. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased 93.5% over the past 60 days. The company’s expected earnings growth rate for the current year is 30.4%.

Heidrick & Struggles International, Inc. HSII, together with its subsidiaries, provides executive search and consulting services to businesses and business leaders worldwide. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased 18.9% over the past 60 days. The company’s expected earnings growth rate for the current year is 24.3%.

TrueBlue, Inc. TBI, together with its subsidiaries, provides specialized workforce solutions in the United States, Canada, and Puerto Rico. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased 5.8% over the past 60 days. The company’s expected earnings growth rate for the current year is more than 100%.

Zacks Top 10 Stocks for 2021

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KornFerry International (KFY) : Free Stock Analysis Report
 
Kforce, Inc. (KFRC) : Free Stock Analysis Report
 
Heidrick & Struggles International, Inc. (HSII) : Free Stock Analysis Report
 
TrueBlue, Inc. (TBI) : Free Stock Analysis Report
 
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