4 Sector ETFs to Play Upbeat October Jobs Data
The U.S. economy added 261,000 jobs in October 2022, above market forecasts of 200,000, per tradingeconomics. Although it marked the weakest reading since December of 2020, figures continued to point to a strong albeit slowing labor market as workers shortages continue. Figures for September were revised higher by 52,000 to 315,000. Monthly job growth has averaged 407,000 thus far in 2022, compared with 562,000 per month in 2021.
In October, average hourly earnings for all employees on private nonfarm payrolls rose by 12 cents, or 0.4% to $32.58. Over the past 12 months, average hourly earnings have increased by 4.7%. In October, average hourly earnings of private-sector production and nonsupervisory employees increased by 9 cents, or 0.3% to $27.86.
In October, the average workweek for all employees on private nonfarm payrolls was 34.5 hours for fifth straight month. In manufacturing, the average workweek for all employees was little changed at 40.4 hours, and overtime decreased by 0.1 hour to 3.1 hours.
Below, we have highlighted some of the sectors that will likely see smooth trading in the days ahead in light of the October jobs data.
Healthcare
Employment in the healthcare industry increased by 53,000 in October. Job gains occurred in health care services (+31,000), nursing and residential care facilities (+11,000), 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.
Leisure
Last month, leisure and hospitality employment grew by 35,000. Employment in accommodation (+20,000) and food services and drinking places (+6,000). Leisure and hospitality has added an average of 78,000 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.
Manufacturing
Employment in manufacturing (+32,000) was in October. Within the industry, job gain in goods industries (+23,000) was notable. Manufacturing employment has increased by an average of 37,000 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.
Transportation
Notable job growth was noticed in truck transportation (+13,000), couriers and messengers (+7,000), and air transportation (+4,000). SPDR S&P Transportation ETF XTN has a Zacks Rank #3 (read: Slew of Solid Q3 Earnings Pushes Transport ETFs Higher).
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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 Leisure and Entertainment ETF (PEJ): ETF Research Reports
SPDR S&P Transportation ETF (XTN): ETF Research Reports
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