Staffing stocks jump on fall in unemployment rate

AP News
Posted: Dec 04, 2009 1:33 PM

Shares of several staffing companies jumped Friday on news that employers cut the fewest number of jobs in November since the start of the recession two years ago.

Analyst Jeffrey M. Silber of BMO Capital Markets said temporary jobs were down 12.5 percent year over year in November, continuing the declines that began in April 2007. But it was the lowest year-over-year decline since September 2008, he said.

He called it "one of the best reports we have seen in some time, helping us gain greater confidence that a labor recovery has begun."

In addition, average weekly hours for full-time employees increased to 33.2 hours from 33 hours in October, Silber said in a note to clients.

"While one month may not make a trend, a rebound in this metric should help spur future increases in temporary staffing volume," he said.

Also, temporary workers as a percentage of the total work force increased to 1.4 percent, continuing a recovery after bottoming in July 2009 at about roughly 1.3 percent, Silber said.

"This is a positive, in our view, as this metric bottoming typically correlates to the end of a recession," he said.

The U.S. Department of Labor reported Friday that the unemployment rate unexpectedly fell to 10 percent last month, from 10.2 percent in October, as employers cut the fewest number of jobs since the recession began.

The better-than-expected figures provided a rare dose of good news for a labor market that's lost 7.2 million jobs in two years.

Shares of Manpower Inc. rose $5.50, or 10.5 percent, to $56.78 in afternoon trading. Robert Half International Inc. increased $2.27, or 9.8 percent, to $25.45. True Blue Inc. added $1.44, or 11.7 percent, to $13.79. And Monster Worldwide Inc. jumped $1.95, or 13 percent, to $16.98.