Group 1: Labor Market Overview - The U.S. job market exceeded expectations for the 11th consecutive month, with 147,000 jobs added in June compared to the forecast of 110,000 [1] - The unemployment rate decreased from 4.2% to 4.1%, better than the expected 4.3% [1] - Average hourly earnings increased by 0.2% month-over-month and 3.7% year-over-year [1] Group 2: Payroll Stocks Performance - Paylocity Holding Corporation (PCTY) and Dayforce (DAY) saw stock increases of over +2% and +1% respectively, both classified as Zacks Rank 3 (Hold) [2] - Paychex (PAYX) is noted for its integrated Human Capital Management (HCM) solutions and has a Zacks Rank 2 (Buy), with expectations for steady growth in top and bottom lines [3] - Maximus (MMS) is identified as a strong buy with a Zacks Rank 1 (Strong Buy), despite a 21% decline from its 52-week high, attributed to a spike in FY25 EPS estimates by 7% [5] Group 3: Market Reactions and Economic Implications - The dip in Maximus stock followed the announcement of 7,000 federal government job cuts, but this may be an overreaction given the addition of 47,000 state government jobs and 19,000 social assistance jobs [6] - The resilient labor market and better-than-expected jobs report contribute positively to the stock market's recovery, making payroll stocks particularly attractive [8]
Payroll Stocks to Watch as June's Jobs Report Comes in Strong