Top 6 Staffing Stocks Amid Steady Decline In Jobless Claims

The U.S. weekly unemployment benefit claims have declined steadily in the last six weeks as reported by the Department of Labor. This clearly shows that the labor market is heading for stabilization despite April's disappointing nonfarm payrolls.

The labor market, which was the best-performing segment of the U.S. economy before the outbreak of coronavirus, suffered the most during the pandemic. Although most of the segments of the economy are showing signs of recovery, the labor market is yet to recover from the impacts of lockdowns.

However, weekly jobless claims data are showing that U.S. businesses are recruiting more lately. This situation bodes well for the staffing firms. Investment in such stocks with a favorable Zacks Rank would boost one's portfolio in the near term.

Signs of Systematic Recovery

On May 20, the Department of Labor reported that weekly jobless claims declined to 444,000 for the week ended May 15 from 478,000 recorded in the previous week. The consensus estimate was 458,000. The data was the lowest since the week ended Mar 14, 2020. Notably, initial claims were hovering around 200,000 in the pre-pandemic period.

Last reported week,  a mere 95,086 applications were filed for jobless claims through the federal relief program. This figure was more than 1 million at its pandemic peak. However, continuing claims (for those who already received benefits) rose 111,000 to a seasonally adjusted 3.75 million, for the week ended May 8.

As of May 1, around 16 million Americans were reportedly receiving benefits from eight separate state and federal programs, dropping a significant 900,000. Notably, receivers of unemployment benefits topped more than 30 million at the pandemic high.

Momentum Likely to Continue

The U.S. economy is witnessing an impressive recovery since the beginning of 2021, faster-than-expected by a large number of market participants. The vaccination drive on a priority basis and an unprecedented stimulus helped the economy to ramp up the level of activities.

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