Time New York: Wed 19 Sep 16:34 pm  |  Save 15% on H&R Block Online

  
caticonslite_bm_alt

U.S. Hiring and Wage Rates Surge in August: 5 Top Picks

Zacks

U.S. joblessness dipped in August and wage rates notched the best annual growth in the past 9 years. The picture clearly hints at a bustling American economy that is weathering the doldrums caused by an escalating trade war between the Republican administration and overseas countries, including China.

The national unemployment rate remained stable at 3.9% in August, one of the lowest levels in half a century, while wage rate secured the highest upside in almost a decade. U.S. companies are not only hiring more but also offering attractive pay packages to employees.

Among all, businesses grouped under the construction, healthcare, business services and transportation sectors gain prominence. An upturn in production and demand are forcing these companies to recruit more, of late.

Against this opportune backdrop, investors can bet on selective stocks from the afore-mentioned sectors to fetch alluring returns.


Joblessness Stays Near 18-Year Low, Recruiters on Hiring Spree

The U.S. economy created 201,000 new jobs in August, marking the 95th straight month of employment gain. The unemployment gauge was in close proximity to the 18-year low stratum. Also, the broader unemployment statistic dipped to 7.4% in August from 8.6% in the year-ago period.

Last month’s job gains were filled in by a range of sectors including business services, healthcare, transportation and construction. Professional and business services added 53,000 jobs in August and nearly 519,000 jobs over the past year. The healthcare sector’s employment rose by 33,000 last month and by 301,000 jobs over last 12 months. On the other hand, the construction and transportation sectors produced 20,000 and 23,000 work opportunities in August and created around 173,000 and 297,000 jobs over the past year, respectively.

In the aggregate, the U.S. economy has spawned an average of 207,000 new jobs each month, so far this year. Notably, we notice that the pace of hiring in 2018 is much faster than both 2017 and 2016.

Wage Rates Peak at 9-Year High, Layoffs Dip to 50-Year Low

Friday’s U.S. Labor Department report revealed that American companies are not only hiring, more but also offering better wages, of late. The annual wage rate in the economy jumped from 2.7% to 2.9% in August, scoring the fastest growth since the Great Recession in 2009. Notably, the average wage rate offered to an American worker climbed 0.4% month over month to $27.16 an hour in August.

Especially, we perceive that companies grouped under the construction, business services, manufacturing, and transportation are paying better than other jobs. Average weekly earnings in August for business services, manufacturing, and transportation employees came in at $1,177.04, $1,176.50, $1,110.28 and $954.72, respectively, higher than$937.02 for the private sector taken together.

On Sep 6, a separate report showed that U.S. layoff rates, as calculated by initial jobless claims slipped by 10,000 to 203,000 in the week prior to the Labor Day holiday, touching the lowest since 1969. This proves that American companies are currently unwilling to lay off employees against a tightened workforce market picture.

The Big Picture

The U.S. economy will likely record the highest job gains this year since 2015. American companies are currently on a hiring spree and have kept layoffs at bay. This proves that the economy is still expanding amid tariff-related uproar rooted by President Trump. Notably, the Federal Reserve is anticipated to impose the third rate hike of 2018 at the end of this month, in light of the economy’s strength.

Corporate spending across most industries is shoring up at a healthy pace on the back of the December-enacted tax overhaul, increased government spending and rising oil prices. Going forward, lower tax rates and the President’s long-awaited $1.5-trillion infrastructure program will likely expedite business investments. This in turn will likely continue to add in jobs in the market.

5 Top Winners

The U.S. economy is firmly placed at present and economic data is mostly favorable. Moving ahead, business sentiments and investments across industries will likely continue to rally on the back of sturdier economic activity.

In sync with this, we have handpicked five top-ranked stocks from selective industries that are currently steaming up and adding in more jobs in the market. These picks will likely add a sparkle to your portfolio.

The companies zeroed down below have a Zacks Rank #1 (Strong Buy) or 2 (Buy) and a VGM Score of A or B. Additionally, these stocks have witnessed positive earnings estimate revisions for the past 60 days.

Heidrick & Struggles International, Inc. HSII offers culture shaping, executive search, and leadership consulting services globally. The Zacks Consensus Estimate for earnings has moved up 11% to $2.01 per share for 2018. The company’s projected year-over-year earnings growth rate is currently pegged at 84.4% and 5.3% for 2018 and 2019, respectively. Heidrick & Struggles International’s shares have gained 35.7% in the past six months. The company sports a Zacks Rank #1 and has a VGM Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.

CRA International, Inc. CRAI provides financial, economic and management consulting services in the global forum. The company sports a Zacks Rank #1 and has a VGM Score of B. The Zacks Consensus Estimate for earnings has moved up 4.6% to $2.28 per share for 2018. The company’s projected year-over-year earnings growth rate is currently pegged at 19.4% and 6.6% for 2018 and 2019, respectively. CRA International’s shares have gained 10.8% in the past six months.

Armstrong Flooring, Inc. AFI manufactures designs and sells flooring products in North America and the Pacific Rim. The company sports a Zacks Rank #1 and has a VGM Score of A. The Zacks Consensus Estimate for earnings has moved up 79.2% to 43 cents per share for 2018. The company’s projected year-over-year earnings growth rate is currently pegged at 104.8% and 53.5% for 2018 and 2019, respectively. Armstrong Flooring’s shares have gained 16.5% in the past six months.

ArcBest Corporation ARCB provides integrated logistic solutions and freight transportation services globally. The company has a Zacks Rank #1 and VGM Score of A. The Zacks Consensus Estimate for earnings has moved up 8.4% to $3.24 per share for 2018. The company’s projected year-over-year earnings growth rate is currently pegged at 143.6% and 5.5% for 2018 and 2019, respectively. ArcBest Corporation’s shares have gained 39.9% in the past six months.

Matson, Inc. MATX provides logistics and ocean transportation services in the market. The company sports a Zacks Rank #1 and has a VGM Score of A. The Zacks Consensus Estimate for earnings has moved up 6.8% to $2.36 per share for 2018. The company’s projected year-over-year earnings growth rate is currently pegged at 32.6% and 7.6% for 2018 and 2019, respectively. Matson’s shares have gained 39.9% in the past six months.

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>


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

To read this article on Zacks.com click here.
<-- You can share this post with your network,
or give us your opinion and leave a comment.
Be sure to check our RSS feeds for updates.