Hiring has slowed in the United States but still remains high. This has left the Fed worried as it continues to struggle to bring down multi-year high inflation while higher interest rates make things difficult for the manufacturing and services sector.
At the same time, wages have been increasing steadily month over month and the unemployment level remains low.
The Labor Department said that nonfarm payrolls increased by 187,000 in July, below the consensus estimate of 200,000. The figure is lower than the previous month’s total of 209,000. However, the labor market still continues to be resilient.
The economy must generate around 100,000 jobs each month to maintain pace with the expansion of the working-age population. Moreover, the report said that there are 1.6 job opportunities for every person.
In July, the growth in employment was driven by robust performance in sectors such as health care, social services, financial activities and wholesale trade.
Within the healthcare industry, a total of 63,000 jobs were added, largely attributed to significant hiring surges by hospitals and nursing-care facilities. Financial services added 19,000 jobs, while wholesale trade added 18,000 jobs.
Moreover, the unemployment rate fell to 3.5% in July from 3.6% in June, reaching levels last seen more than 50 years ago. Also, hourly wages increased 0.4% in July, the same as the rise in June. On a year-over-year basis, hourly wages increased 4.4% in July.
As the U.S. economy continues to witness the addition of more jobs, staffing companies are undoubtedly poised to reap rewards. Given their direct connection to job growth, they stand to gain significantly.
Additionally, it’s important to note that recent layoffs from various companies have prompted a greater number of people to seek new employment opportunities, which ultimately aid staffing companies. Moreover, as inflation is managed and the Federal Reserve halts its rate hikes, businesses will likely increase hiring, which will, in turn, benefit staffing firms.
Stocks to Watch
Heidrick & Struggles International, Inc. HSII serves the executive talent and leadership needs of the world’s top organizations as the premier provider of leadership consulting, culture shaping and senior-level executive search services. HSII is one of the leading global executive search firms. With years of experience in fulfilling their clients’ leadership needs, Heidrick & Struggles offers and conducts executive search services in every major business center in the world.
Heidrick & Struggles International’s expected earnings growth rate for next year is 7.6%. The Zacks Consensus Estimate for current-year earnings has improved 3.4% over the past 60 days. HSII shares have gained 11% in the past three months. Heidrick & Struggles International presently sports a Zacks Rank #1 (Strong Buy).
RCM Technologies, Inc. RCMT is a national provider of Business, Technology and resource solutions in information technology and professional engineering to customers in corporate and government sectors. RCMT has grown its information technology competencies in the areas of resource augmentation, e-business, Enterprise Resource Planning support, network and infrastructure support and knowledge management.
RCM Technologies’ expected earnings growth rate for next year is 22%. RCMT shares have gained 34.8% in the past three months. RCM Technologies has a Zacks Rank #3 (Hold).
ManpowerGroup Inc. MAN 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 17.4%. Shares of MAN have gained 7.8% in the past three months. ManpowerGroup carries a Zacks Rank #3.
ManpowerGroup Inc. (MAN): Free Stock Analysis Report
Heidrick & Struggles International, Inc. (HSII): Free Stock Analysis Report
RCM Technologies, Inc. (RCMT): Free Stock Analysis Report
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