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The broader indexes saw a nice uptick on Friday as May's Jobs report came in better than expected, with the S&P 500 and Nasdaq rising over +1%. Driving the stock market’s uptick, U.S. employers added 139,000 jobs, which came in above most economists’ expectations of 125,000-130,000, while the unemployment rate remained steady at 4.2%.

Also helping to appease tariff uncertainty was that wage growth outpaced inflation, with average hourly earnings rising 3.9% year over year compared to April’s latest reading of a 2.3% inflationary uptick (Consumer Price Index). Notably, the next inflation report is set for Wednesday, June 11, when the Fed releases the latest CPI data.   

That said, here are a few stocks investors will want to consider following May’s optimistic jobs report, with payroll stocks being of interest in particular.

Image Source: Federal Reserve Economic Data

Zacks Rank #1 (Strong Buy) Stocks - PCTY, MMS
 

Paylocity (PCTY - Free Report) is a cloud-based payroll and human capital management (HCM) software solutions provider to keep an eye on. Notably, Paylocity has continued an impressive streak of surpassing earnings expectations, most recently beating EPS estimates for its fiscal third quarter by 16% in May. Paylocity has now exceeded the Zacks EPS Consensus for 26 consecutive quarters with an average EPS surprise of 15.4% over the last four quarters.

Image Source: Zacks Investment Research

Meanwhile, government health and human services program provider Maximus (MMS - Free Report) is benefiting from a pleasant trend of rising EPS revisions and trades at a very reasonable 10.8X forward earnings multiple. Glamorizing Maximus’ attractive P/E valuation, fiscal 2025 and FY26 EPS estimates have risen nearly 7% and 4% in the last 30 days, respectively, with the company blasting earnings expectations for its fiscal second quarter by 47% last month (Q2 EPS of $2.01 versus $1.37 Consensus).

Image Source: Zacks Investment Research

Other Stocks to Watch
 

Other payroll stocks to consider include HCM software providers Dayforce (DAY - Free Report) and Paychex (PAYX - Free Report), along with outsourcing company Barrett Business Services (BBSI - Free Report), which all land a Zacks Rank #3 (Hold).

Furthermore, certain medical and hospitality-related stocks are appealing as May’s Jobs report showed job growth was strongest in the healthcare and leisure/hospitality sectors, which added 62,000 and 48,000 jobs, respectively.

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