Dispelling doubts over the health of the U.S. economy, strong February jobs data added a touch of optimism to last Friday’s proceedings. Jobs growth came in above most estimates, indicating a steadily improving labor market. A few niggles on wage growth and work hours remained, but year-over-year gains were strong.

Healthcare, retail and restaurants emerged as the largest contributors to job additions in February. This underlines the fact that stocks from these sectors make for good investment options. Picking growth oriented stocks from these industries would provide your portfolio with added impetus.

Substantial Job Additions

The report from the Bureau of Labor Statistics (BLS) shows us that the economy was boosted by 242,000 job additions this month, beating the consensus estimate of 194,000. This also exceeded January’s revised figure of 172,000 by a wide margin. Unemployment remained in line with January’s rate of 4.9%.

Additionally, U6, the most rigorous metric of unemployment in the U.S. economy, declined by 0.2% to 9.7%. This measure takes into account individuals who are not searching for employment or those who are working part time since they cannot secure full time employment.

However, there were a few worries on other fronts. The average workweek declined by 0.2 hours to 34.4 hours in February from January’s figure of 34.6 hours. Also, average hourly earnings declined 0.1% in February from January to $24.80 per hour, in contrast to the estimate of a 0.2% increase. However, the measure increased 2.2% on a yearly basis.

Healthcare, Retail, Restaurants Largest Contributors

The top three contributing sectors to February’s job additions were healthcare, retail and restaurants. Social assistance and healthcare contributed 57,000 jobs during the month. The healthcare industry has accounted for 181,000 job additions over the last 12 months. Several market watchers believe that this is one of the positive outcomes of Obamacare.

Meanwhile, the retail and restaurant sectors have also made strong contributions. This is a near circular effect of an improving job market. A continual slump in oil prices has also expanded the consumer’s purchasing power. Data from American Automobile Association (AAA) reveals that gas prices were at their lowest for the month of February in more than a decade.

Our Choices

February’s job additions indicate that the health of the labor market has improved considerably. Additionally, this means that the economy continues to grow at a steady, albeit slow pace.

Retail, restaurants and healthcare have emerged as the strongest beneficiaries of these factors. This is why it makes good sense to add growth oriented stocks from these industries to your portfolio. Our selection is also backed by a good Zacks Growth Score and Zacks Rank.

Our research shows that stocks with a Growth Style Score of ‘A’ or ‘B’ when combined with a Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy) offer the best investment opportunities in the growth investing space.

HCA Holdings, Inc. (HCA - Snapshot Report) operates a network of acute care hospitals, outpatient facilities, clinics and other patient care delivery settings.

HCA Holdings holds a Zacks Rank #1 (Strong Buy) and has a Growth Style Score of ‘A.’ The company has expected earnings growth of 12.3% for the current year. The earnings estimate for the current year has increased by 8% over the last 60 days.  

Acadia Healthcare Company, Inc. (ACHC - Snapshot Report) provides inpatient behavioral health care services.

Acadia Healthcare holds a Zacks Rank #2 (Buy) and has a Growth Style Score of ‘B.’ The company has expected earnings growth of 27.7% for the current year. The earnings estimate for the current year has increased by 0.4% over the last 30 days.  

Sprouts Farmers Market, Inc. (SFM - Snapshot Report) engages in the retailing of natural and organic food primarily in the U.S.

Apart from a Zacks Rank #2, Sprouts Farmers Market has a Growth Style Score of ‘A.’ The company has expected earnings growth of 13.2% for the current year. The earnings estimate for the current year has increased by 1.7% over the last 30 days.  

The Kroger Co. (KR - Analyst Report) is one of the largest grocery retailers in the U.S. operating 2,774 supermarkets and multi-department stores

Kroger holds a Zacks Rank #2 and has a Growth Style Score of ‘A.’ The company has expected earnings growth of 8.3% for the current year. The earnings estimate for the current year has increased by 0.2% over the last 30 days. 

Red Robin Gourmet Burgers Inc. (RRGB - Analyst Report) is a full-service casual dining restaurant chain that serves burgers.

Apart from a Zacks Rank #2, Red Robin Gourmet Burgers has a Growth Style Score of ‘A.’ The company has expected earnings growth of 11.7% for the current year. The earnings estimate for the current year has increased by 3.8% over the last 30 days.  

The Cheesecake Factory Inc. (CAKE - Analyst Report) operates upscale, casual, and full-service dining restaurants in the U.S.

Cheesecake Factory holds a Zacks Rank #2 and has a Growth Style Score of ‘A.’ The company has expected earnings growth of 11.9% for the current year. The earnings estimate for the current year has increased by 0.5% over the last 30 days.