The staffing industry has been growing steadily on promising developments in the broader economy. Trump administration’s business-friendly approach, including tax cuts and higher government spending, has been a major catalyst. Thriving manufacturing and non-manufacturing activities backed by favorable policies are leading to additional hiring and wage increase.
There are fresh signs of labor market tightening as the latest U.S. Labor Department data revealed that jobless claims for the week ended Jan 12 fell to a five-week low. The figure was 213,000, down 3,000 from the previous week’s unrevised level and much below the consensus estimate of 222,000.
The four-week moving average is considered a better measure of labor market trends as it evens out the sharp fluctuations in weekly reports. The metric declined 1,000 to 220,750.
Labor Market Still Tight
While the economy continues to create new jobs despite a record low jobless rate, a tight labor market is compelling companies to pay higher to attract and retain employees.
Non-farm payrolls climbed 3,12,000 jobs last month after rising 1,55,000 in November. Average hourly earnings in December increased 11 cents to $27.48, registering 3.2% year-over-year increase, higher than 3.1% witnessed in November.
Manufacturing and Non-manufacturing Solid
The Purchasing Managers' Index (PMI) measured by Institute of Supply Management (ISM) touched 54.1% in December, indicating better economic activity in the manufacturing sector. This marks the 28th consecutive month of manufacturing growth. Also, December was the 107th straight month of growthin non-manufacturing activities, with ISM-measured Non-Manufacturing Index (NMI) touching 57.6%.
Jobs Growth to Continue
The Conference Board’s Employment Trends Index increased to 111.61 in December, following a slight decline in November, registering year-over-year growth of 5.4%.
Gad Levanon, Chief Economist at the Conference Board said that “While employment growth could slow down in 2019, it is still likely to expand fast enough to further tighten the labor market. All the main measures of wages are now rapidly accelerating, suggesting that more people from the sidelines will return to the labor force in 2019.”
Staffing Stocks Gain Prominence
Given inherent stability in the economy, the global staffing market, which is expected to witness growth of 6% in 2019 by Staffing Industry Analysts (SIA), stands to gain.
Below, we have mentioned four staffing stocks that are currently benefiting from sustained growth in the industry.
Two of these stocks hold a Zacks Rank #1 (Strong Buy) or #2 (Buy). We have also mentioned two more stocks, which we believe investors should hold on to as these carry a Zacks Rank #3 (Hold).
We also take into account Growth Style Score which condenses all the essential metrics from the company’s financial statements to get a true sense of the quality and sustainability of its growth.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Resources Connection RECN, a provider of employment engagement, compensation and incentive plan strategies and design, sports a Zacks Rank #1 and has a Growth Score of A.
The company expects earnings growth of 2% for the current fiscal year. The Zacks Consensus Estimate for the current year has increased 14.9% in the past 60 days.
Resources Connection, Inc. Price, Consensus and EPS Surprise
Resources Connection, Inc. Price, Consensus and EPS Surprise | Resources Connection, Inc. Quote
Korn/Ferry International KFY, a global provider of talent management solutions, carries a Zacks Rank #2 and has a Growth Score of A.
The company expects earnings growth of 23.5% for the current year. The Zacks Consensus Estimate for the current year has increased 1.8% in the past 60 days.
Korn/Ferry International Price, Consensus and EPS Surprise
Korn/Ferry International Price, Consensus and EPS Surprise | Korn/Ferry International Quote
Insperity Inc. NSP, engaged in providing an array of human resources and business solutions, carries a Zacks Rank #3 and has a Growth Score of A.
The company’s expected earnings growth rate for the current year is 8.4%. The Zacks Consensus Estimate for the current year remained unchanged in the last 60 days.
Insperity, Inc. Price, Consensus and EPS Surprise
Insperity, Inc. Price, Consensus and EPS Surprise | Insperity, Inc. Quote
BG Staffing, Inc. BGSF, a provider of temporary staffing services, also carries a Zacks Rank #3 and has a Growth Score of A.
The company’s expected earnings growth rate for the current year 12.4%. The Zacks Consensus Estimate for the current year has remained unchanged in the past 60 days.
BG Staffing Inc Price, Consensus and EPS Surprise
BG Staffing Inc Price, Consensus and EPS Surprise | BG Staffing Inc Quote
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