Proprietary Data Insights
Financial Pros Top Staffing & Employment Services Stocks Last Month
Companies Turn to Freelance
Our main story highlights the improvements in the job market. However, there is still an enormous gap between where we started in 2019 and where we are today.
Increasingly, employers are leaning on smaller businesses and freelancers to fill this void.
In the U.S., the number of freelancers surged from 2014 to 2017 before stalling.
Growth quickly kicked back in during the pandemic and has continued ever since.
Globally, the freelance market is expected to grow at 15.3% from 2021-2026.
Companies like Upwork (UPWK) and Fiverr (FVRR) capitalized on this trend to become the two largest freelance platforms in the world. Unsurprisingly, they’re the top two staffing and employment stocks by financial pros over the last month.
Not only are businesses able to contract individual projects, but they can often find long-term employees to hire.
This may explain the current employment situation and why the hiring gap may never be filled.
The trend bodes well for ancillary services that help freelancers operate including H&R Block (HRB) and Zoom Communications (ZM).
If you’ve never worked with or hired a freelancer before, here are a few tips:
The Great Resignation Ends
Workers appear to be settling down as quits declined last month to the lowest levels since October.
JOLT Jobs Report
Every month, the Bureau of Labor Statistics releases a Jobs Openings and Labor Turnover Survey. The report tells us:
January’s report showed 4.252M people quit their jobs, down from 4.510M in October.
However, we’re still well above the 3.311M from January of 2021.
Leisure and hospitality continue to experience more resignations than any other industry at 5.6%, with the second worst in retail trade at 4.6%.
While Leisure and hospitality tops the industries for the highest job opening rate at 9.9%, it only had 1.676M openings in January, down from 1.990M the prior month.
The national hire rate remained unchanged at 4.3%.
Here’s What That Means.
Steady hiring coupled with a decline in quits helps fill our workforce and stabilize labor costs.
Over the past year, wages have increased 5.1% according to the latest jobs report. That feeds into the price we pay for goods and services.
Keeping workers in place and filling much needed company roles will help ease this specific pressure.
The report also gives the Federal Reserve more data that says it needs to hike interest rates to curtail demand.
The Fed hopes that by raising rates, people buy less, which can lead to less job openings that need to be filled.
However, even though the labor market has bounced back, we are still about 2 million jobs short of where we were prior to the pandemic.
The Bottom Line: Leisure and hospitality has become the proxy for our labor market. It’s the one sector that cannot be outsourced since it requires face to face contact.
That sector is improving and all signs are that it should continue to do so.
That will help the inflation picture and give stability to corporate earnings along with a revenue boost from increased volume, especially for companies like Marriott (MAR), Hilton Hotels (HLT), and Caesar’s Entertainment (CZR).
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