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4 Sector ETFs to Play Upbeat November Jobs Data

The U.S. economy added 263,000 jobs in November 2022, above market forecasts of 200,000, per tradingeconomics. Although it marked the weakest reading since April of 2020, figures continued to point to a strong albeit slowing labor market as workers shortages continue. Figures for October were revised higher to 284,000.

Monthly job growth has averaged 392,000 thus far in 2022, compared with 562,000 per month in 2021. Job gains remain above the pre-pandemic average of 150,000-200,000 jobs created per month. In November, average hourly earnings for all employees on private nonfarm payrolls rose by 18 cents, or 0.6% to $32.58.

Over the past 12 months, average hourly earnings have increased by 5.1%. In November, average hourly earnings of private-sector production and nonsupervisory employees increased by 19 cents, or 0.7% to $28.10. In November, the average workweek for all employees on private nonfarm payrolls declined by 0.1 hour to 34.4 hours.

Below, we have highlighted some of the sectors that will likely see smooth trading in the days ahead in light of the November jobs data.

Leisure

Last month, leisure and hospitality employment grew by 88,000. Employment in food services and drinking places (+62,000) was notable. The leisure and hospitality sector has added an average of 82,000 jobs per month thus far this year, less than half of the average gain of 196,000 jobs per month in 2021. Employment in leisure and hospitality is still down by 6.5% from February 2020. The data makes Invesco Dynamic Leisure and Entertainment ETF PEJ a timely investment. The fund has a Zacks Rank #2 with a High risk outlook.

Healthcare

Employment in the healthcare industry increased by 45,000 in November. Job gains occurred in health care services (+23,000), nursing and residential care facilities (+10,000), and hospitals (+11,000). So far in 2022, health care employment has increased by an average of 47,000 per month, compared with 9,000 per month in 2021.  The Zacks Rank #2 (Buy) fund Health Care Select Sector SPDR ETF XLV can be played to tap the momentum.

Construction

Employment in construction (+20,000) was in November. Within the industry, job gain in nonresidential building (+8,000) was notable. Construction has added an average of 19,000 jobs per month thus far this year, almost same with the 2021 average of 16,000 per month. Invesco Dynamic Building & Construction ETF PKB can be closely-watched.

Manufacturing

Employment in manufacturing (+14,000) was in November. Manufacturing employment has increased by an average of 34,000 per month thus far this year, compared with 30,000 per month in 2021. Industrial Select Sector SPDR ETF XLI has a Zacks Rank #2.

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Industrial Select Sector SPDR ETF (XLI): ETF Research Reports

Health Care Select Sector SPDR ETF (XLV): ETF Research Reports

Invesco Dynamic Building & Construction ETF (PKB): ETF Research Reports

Invesco Dynamic Leisure and Entertainment ETF (PEJ): ETF Research Reports

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Zacks Investment Research