Cramer: U.S. Job Growth Is Imminent

Data from the U.S. Department of Labor might indicate otherwise, but Cramer on Wednesday said the employment picture is about to improve.

The "Mad Money" host explained that the monthly employment figures and weekly jobless-claims number, for example, are known as lagging indicators. In other words, they provide a snapshot of what's already happened instead of what's to come. But for an indication of what's ahead, Cramer listens to what individual companies are saying. Staffing, payroll and hiring companies tend to give a great read on jobs, he said, and as it turns out, their outlook is a lot brighter than it has been.

An increase in temporary hiring signals permanent hiring to come, Cramer said, so staffing companies are a great read on the overall job situation—and they are great plays on rising employment. For lower-level administrative and light industrial hiring, he likes TrueBlue and Manpower . Both companies recently beat on earnings and also gave better-than-expected guidance. TrueBlue said small customers are coming back and revenue from its manufacturing clients rose by 50 percent year-over-year. Revenue from clients in other industries climbed by 20 percent. Meanwhile, Manpower delivered organic growth of 35 percent year-over-year in its U.S. business. Both companies do a large chunk of their business in the U.S.

Robert Half and K-Force are two staffing companies that specialize in highly skilled jobs, like information technology, accounting, legal, engineering and sales. Seventy-two percent of Robert Half's business is domestic, and K-Force does nearly 100 percent of its business in the U.S. Both companies recently beat on earnings and said they expect strong growth in several areas, including tech, accounting and clinical research.

Payroll outsourcing companies are another good read on job creation. Cramer likes Automatic Data Processing, as well as Paychex. ADP delivered higher-than-anticipated earnings and revenues in October and said employees per customer grew up 1.7 percent. In other words, ADP's customers are adding more jobs. A few weeks ago, ADP's monthly employment report showed the private sector added 93,000 jobs in November. Paychex will report earnings on Monday.

Another indicator is whether office-supply stores are selling to small businesses. Cramer said Staples was bullish about new business customer creation on its latest conference call. Meanwhile, OfficeMax and Office Depot delivered better-than-expected earnings, which Cramer said wouldn't happen if small businesses weren't growing.

"Look, these are pure empirical plays on what's going to happen in the future on hiring," Cramer said. "These companies are saying that the kinds of inquiries and assignments and listings they are getting are becoming stronger week by week, something that portends awesome hiring for 2011."

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