5 Best Stocks To Gain From Blockbuster Jobs Report
Zacks Investment Research | Feb 04, 2019 06:55AM ET
Jobs growth in January smashed estimates, with nonfarm payrolls increasing for the 100th straight month. Hiring boomed despite a partial government shutdown that was the longest in history, dismissing fears of a major slowdown for the U.S. economy. Let us, thus, look at stocks that can make the most of a stellar jobs report and scale north.
Hiring Continues at Blistering Pace
The U.S. economy continues to be one of the world’s most powerful employment generating machines. According to the Bureau of Labor Statistics, the economy added 304,000 new jobs last October, exceeding analysts’ estimates of around 172,000.
December’s job additions, in the meanwhile, were revised down from 312,000 jobs to 222,000, while November’s rose from 176,000 to 196,000. Nonetheless, the average for the last three months is now 241,000 jobs, marking one of the best stretches during an economic expansion dating back nine-and-a-half years ago. By the way, employment gains in 2018 turned out to be the strongest in the last three years.
(Source: Bureau of Labor Statistics)
The jobless rate, in the meantime, ticked up to 4% from 3.9%. However, it continues to languish at historically low levels. Further, a higher jobless rate was mostly due to the government shutdown, but it had “no discernible impacts” on the uptick in hiring last month, added the Labor Department.
A separate measure of employment that considers discouraged workers and those holding part-time positions for economic reasons went up to 8.1% from 7.6%. But, that’s still well below the 9.3% level when President Trump took office.
Staffing to Shine
Such a strong month of hiring has resulted in the labor force participation rate to increase to 63.1%, the highest in Trump’s era. This surely bodes well for staffing companies. Additionally, the Conference Board’s Employment Trends Index was 111.61 last December, up from 110.23 in November. Compared to the year-ago level, the index shows a jump of 5.4%.
Gad Levanon, Chief Economist, North America, at The Conference Board said that “the Employment Trends Index rose sharply in December, reversing the declines in recent months, suggesting that employment will continue to expand in the coming months.”
The buoyancy in the staffing space is further confirmed by its solid Zacks Investment Research
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