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4 Sector ETFs Looking Solid Amid Soft November Jobs Data
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The U.S. economy added 245,000 jobs in November, heavily easing from a downwardly revised 610,000 in October, and considerably below market expectations of 469,000. It represented the smallest employment gain since the labor market recovery which started in May.
In November, the unemployment rate fell to 6.7%. The rate is down by 8.0 percentage points from its recent high in April but is still 3.2 percentage points higher than it was in February. The number of unemployed persons maintained a falling trend in November but is 4.9 million higher than in February.
Notably, the U.S. labor market recorded a historic 20.787 million loss in April as an effect of the COVID-19-inuced lockdown. The outlook for the labor market looks bleak with rising virus infections and new restrictions imposed by several states. Still, there are some sectors that added solid job gains in November. Below we highlight those winners.
Winning Sector ETFs
Transportation and Warehousing
Employment in transportation and warehousing is up by 145,000 in November but is 123,000 below its February level. The division of couriers and messengers saw job gains by 82,000 and the division of warehousing and storage registered 37,000 jobs gains. Since February, employment in these industries has increased by 182,000 and 97,000, respectively.
The underlying Dow Jones Transportation Average Index measures the performance of companies from the Industrial Transportation, Airline and General Industrial Services industries of the U.S. equity market. Delivery and courier services company FedEx (FDX) takes about 14% of the fund.
Health Care
Jobs in the health care sector grew 46,000 in the month, with gains in offices of physicians (+21,000), home health care services (+13,000), and offices of other health practitioners (+8,000) in the spotlight. Employment in health care is down 527,000 since February.
The underlying Health Care Select Sector Index includes companies from the following industries: pharmaceuticals; health care providers & services; health care equipment & supplies; biotechnology; life sciences tools & services; and health care technology.
Industrials
Manufacturing employment increased 27,000, but it is still off 599,000 from February. Motor vehicles and parts (+15,000), and plastics and rubber products (+5,000) contributed to the gains.
The fund looks to provide precise exposure to companies in the following industries: aerospace and defense; industrial conglomerates; marine; transportation infrastructure, machinery; road and rail; air freight and logistics; and commercial services and supplies.
Construction
The sector added 27,000 jobs in November, but employment is 279,000 below its February level. In November, employment increased by 14,000 in residential specialty trade contractors and by 10,000 in heavy and civil engineering construction.
This fund looks to track the performance of the construction sector of the U.S. equity market. The fund has heavy exposure to the homebuilding sector and building products.
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4 Sector ETFs Looking Solid Amid Soft November Jobs Data
The U.S. economy added 245,000 jobs in November, heavily easing from a downwardly revised 610,000 in October, and considerably below market expectations of 469,000. It represented the smallest employment gain since the labor market recovery which started in May.
In November, the unemployment rate fell to 6.7%. The rate is down by 8.0 percentage points from its recent high in April but is still 3.2 percentage points higher than it was in February. The number of unemployed persons maintained a falling trend in November but is 4.9 million higher than in February.
Notably, the U.S. labor market recorded a historic 20.787 million loss in April as an effect of the COVID-19-inuced lockdown. The outlook for the labor market looks bleak with rising virus infections and new restrictions imposed by several states. Still, there are some sectors that added solid job gains in November. Below we highlight those winners.
Winning Sector ETFs
Transportation and Warehousing
Employment in transportation and warehousing is up by 145,000 in November but is 123,000 below its February level. The division of couriers and messengers saw job gains by 82,000 and the division of warehousing and storage registered 37,000 jobs gains. Since February, employment in these industries has increased by 182,000 and 97,000, respectively.
iShares Transportation Average ETF (IYT - Free Report)
The underlying Dow Jones Transportation Average Index measures the performance of companies from the Industrial Transportation, Airline and General Industrial Services industries of the U.S. equity market. Delivery and courier services company FedEx (FDX) takes about 14% of the fund.
Health Care
Jobs in the health care sector grew 46,000 in the month, with gains in offices of physicians (+21,000), home health care services (+13,000), and offices of other health practitioners (+8,000) in the spotlight. Employment in health care is down 527,000 since February.
Health Care Select Sector SPDR Fund (XLV - Free Report)
The underlying Health Care Select Sector Index includes companies from the following industries: pharmaceuticals; health care providers & services; health care equipment & supplies; biotechnology; life sciences tools & services; and health care technology.
Industrials
Manufacturing employment increased 27,000, but it is still off 599,000 from February. Motor vehicles and parts (+15,000), and plastics and rubber products (+5,000) contributed to the gains.
Industrial Select Sector SPDR Fund (XLI - Free Report)
The fund looks to provide precise exposure to companies in the following industries: aerospace and defense; industrial conglomerates; marine; transportation infrastructure, machinery; road and rail; air freight and logistics; and commercial services and supplies.
Construction
The sector added 27,000 jobs in November, but employment is 279,000 below its February level. In November, employment increased by 14,000 in residential specialty trade contractors and by 10,000 in heavy and civil engineering construction.
iShares US Home Construction ETF (ITB - Free Report)
This fund looks to track the performance of the construction sector of the U.S. equity market. The fund has heavy exposure to the homebuilding sector and building products.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>