The U.S. labor market continued its strength with solid hiring in February, easily dodging the global slowdown and a tumultuous stock market. The economy added 242,000 jobs in February, much above the market expectation of 190,000.

The majority of the additions were seen in health care, retail, bars and restaurants, and construction that more than offset the decline in the mining sector. Unemployment remained unchanged at an eight-year low of 4.9% while job gains for December and January were revised upward by a combined 30,000. However, average hourly wages unexpectedly dipped 0.1% after a strong 0.5% increase in January. This reflects the first monthly drop since December 2014 and lowered the year-over-year wage increase to 2.2% from 2.5% for January.

The robust data eased fears of a recession in the U.S. and infused further signs of confidence into the economy. Investors’ sentiment thus turned toward risk-on trade once again. While a solid hiring number is strong enough to support the Fed’s gradual interest rates hike this year, tepid wage growth remains a matter of concern (read: Manufacturing Data Point to Recovery: ETFs, Stocks to Consider).

Market Impact

The news extended the U.S. stock market’s three-week winning streak seen this year. In particular, the Dow Jones Industrial Average climbed to over 17,000 for the first time since January 5 while the S&P 500 surpassed 2000 during the trading session but closed at a lower level. Yields on two-year and 10-year Treasury bonds soared to one-month high levels but fell at the close. On the other hand, U.S. dollar remained volatile given that the solid pace of hiring was tarnished by a drop in average hourly wages.

Given this, i have highlighted three ETFs and stocks that will be the direct beneficiaries of job gains and see smooth trading in the days ahead.

ETFs to Buy

PowerShares DB US Dollar Bullish Fund (UUP - ETF report)

A healing job market and the resultant improving economy will pull in more capital into the country and lead to appreciation of the U.S. dollar. UUP is the prime beneficiary of the rising dollar as it offers exposure against a basket of six world currencies – euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc. This is done by tracking the Deutsche Bank Long US Dollar Index Futures Index Excess Return plus the interest income from the fund’s holdings of the U.S. Treasury securities.

In terms of holdings, UUP allocates nearly 57.6% in euro and 25.5% collectively in the Japanese yen and British pound. The fund has so far managed an asset base of $830.6 million while sees an average daily volume of around 1.6 million shares. It charges 80 bps in total fees and expenses, and lost 0.3% on the day following the jobs report. The fund has a Zacks ETF Rank of 2 or ‘Buy’ rating with a Medium risk outlook (read: These Commodity Currency ETFs Outpacing Dollar to Start 2016).

SPDR S&P Homebuilders ETF (XHB - ETF report)

Solid labor market fundamentals along with affordable mortgage rates will continue to fuel growth in a recovering homebuilding sector, creating a buying opportunity in homebuilders and housing-related stocks. In addition, slower and gradual rate hikes will not impede the growth prospect of the sector, at least in the short term. The most popular choice in the homebuilding space, XHB, follows the S&P Homebuilders Select Industry Index.

In total, the fund holds about 37 securities in its basket with none accounting for more than 5.21% share. The product focuses on mid-cap securities with 67% share, followed by 24% in small caps. The fund has amassed about $1.5 billion in its asset base and trades in heavy volume of more than 3.7 million shares. Expense ratio comes in at 0.35%. XHB added 0.2% on the day and has a Zacks ETF Rank of 2 with a High risk outlook.

SPDR S&P Retail ETF (XRT - ETF report)

Retail will also benefit from accelerating job growth though soft wage growth points to reduced spending power. XRT tracks the S&P Retail Select Industry Index, holding 100 securities in its basket. It is widely spread across each component as none of these holds more than 1.78% of total assets. Small-cap stocks dominate about three-fifths of the portfolio while the rest have been split between the other two market cap levels (read: Small Cap ETFs Leading Current Market Rally).

XRT is the most popular and actively traded ETF in the retail space with AUM of about $617.2 million and average daily volume of around 4.4 million shares. It charges 35 bps in annual fees and gained 0.5% on the day. The product has a Zacks ETF Rank of 1 or ‘Strong Buy’ rating with a Medium risk outlook.

Stocks to Buy

Though several sectors will benefit from healthy hiring, the direct beneficiary is the staffing industry. The industry bodes well at least for the near term given its superb Zacks Industry Rank (in the top 11%) at the time of writing. Investors seeking to ride out the optimism could look at a few top-ranked stocks handpicked by us using our Zacks Stock Screener. These stocks have a Zacks Rank #1 (Strong Buy) or #2 (Buy), a Growth or Value Style Score of B or better, and an above-average industry earnings growth of 13.7%.
 
Cross Country Healthcare Inc. (CCRN - Snapshot Report)
 
Based in Boca Raton, Florida, Cross Country is a leading healthcare staffing services’ company which primarily focuses on providing nurse and allied, and physician staffing services and workforce solutions.
 
The stock is expected to deliver year-over-year earnings growth of 26.9% in fiscal 2016. It shed 1.2% in Friday’s trading session and currently has a Zacks Rank #2 with a Growth Style Score of ‘A’ (read: Growth ETFs Regain Momentum: Will This Last?).
 
TrueBlue Inc. (TBI - Snapshot Report)
 
Based in Tacoma, Washington, TrueBlue is a leading provider of staffing, recruitment process outsourcing, and managed services in the United States, Canada and Puerto Rico.
 
The company’s earnings are expected to growth 48.4% year over year in fiscal 2016. TBI gained 0.7% on the day and has a Zacks Rank #1 with a Value Style Score of ‘B’.
 
Insperity Inc. (NSP - Snapshot Report)
 
Based in Kingwood, Texas, Insperity provides an array of human resources and business solutions to enhance the performance of small and medium-sized businesses in the United States.
 
The company has an incredible earnings growth projection of 53.8% for fiscal 2016. The stock was down 0.2% in Friday’s session and has a Zacks Rank #1 with Growth and Value Style Scores of ‘A’ each.