Good News From The US
Good News From The US
Shares of staffing companies surged Tuesday after a report showed the U.S. service sector expanded in September for a ninth straight month.
The Institute for Supply Management reported its service-sector index increased last month to 53.2 from 51.5 in August.
The rate hit a high point of 55.4 in March, stayed there in April and May, and has fluctuated since. Readings above 50 signal growth.
The service sector is the nation's predominant employer. While the index increase was modest, it bodes well for staffing firms which could see a bump in business as companies look to add new employees.
The news sent shares of Kelly Services up 74 cents, or 6.3 percent, to $12.52 in afternoon trading, while SFN shares added 37 cents, or 6.1 percent, to $6.49.
Shares in Robert Half International Inc. rose 89 cents, or 3.5 percent, to $26.27. Barrett Business Services Inc.'s shares added 76 cents, or 5.2 percent, to $15.53. Kforce Inc. shares rose 72 cents, or 5.5 percent, to $13.89.
Weak consumer spending has kept the service industry, which employs about 83 percent of workers in the private sector, from gaining momentum after the recession ended.
Economists say Tuesday's reading was better than expected but not enough to change their forecast for high unemployment and slow job growth for the rest of the year.
An analysis by Credit Suisse economist Jill Brown of ISM's employment measure in September suggests the economy added about 90,000 jobs in the service sector last month.
More good news about hiring, this time from the American Staffing Association, which represents members of the $61 billion U.S. staffing industry.
For the first time in more than two years, the ASA Staffing Index, a measure of employment in the staffing industry, hit 100. That means employment in staffing has returned to a level comparable to 29 months ago. The last time the weekly index hit 100 was the week of May 12, 2008.
U.S. staffing employment is about 25 percent higher during the week of Sept. 20-26 than the same week in 2009.
The ASA Staffing Index was at 100 in June 2006, peaking at 110 in the fourth quarter of 2007, and then began slipping until September of that year when it plunged to 69 by year-end.