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4 Sector ETFs to Sizzle on Robust March Jobs Report

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The U.S. economy added 916,000 jobs in March 2021, after an upwardly revised 468,000 rise in February and breezing past market expectations of a rise of 647,000 thanks to easing business restrictions amid reopening of economies, declining coronavirus infection rates, vaccine distribution from multiple makers and hefty fiscal stimulus under the Biden administration. The job growth was the fastest since August 2020.

Overall, revisions added 156,000 jobs to the totals for January and February. The U.S. unemployment rate dropped to 6% in March of 2021 from 6.2% in the previous month, the lowest rate in a year and same as market expectations. The rate has been on a downtrend in recent months after reaching an all-time high of 14.8% last April.

Investors may want to bet on ETFs that are the largest beneficiaries of job gains. Below, we have highlighted some of these that are likely see smooth trading in the days ahead.


Last month, leisure and hospitality employment grew by 280,000, thanks mainly to the increasing reopening of the economy. Gains mainly occurred in food services and drinking places (+176,000). Job gains also happened in arts, entertainment, and recreation (+64,000) and in accommodation (+40,000). Employment in leisure and hospitality is still down by 3.1 million, or 18.5% since February 2020 or the pre-pandemic period.

The data makes Invesco Dynamic Leisure and Entertainment ETF (PEJ - Free Report) a timely investment. The fund has a Zacks Rank #3 (Hold) with a Medium risk outlook.


The sector added 110,000 jobs in the month with gains of 65,000 in specialty trade contractors, 27,000 in heavy and civil engineering construction, and 18,000 in construction of buildings. Construction employment is still lower by 182,000 than in February 2020.

The fund Invesco Dynamic Building & Construction ETF (PKB - Free Report) should thus benefit. The underlying Dynamic Building & Construction Intellidex Index comprises stocks of U.S. building and construction companies. The index is designed to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including fundamental growth, stock valuation, investment timeliness and risk factors. The fund has a Zacks Rank #3.


Last month, employment in transportation and warehousing grew by 48,000, thanks mainly to increase in couriers and messengers (+17,000), transit and ground passenger transportation (+13,000), support activities for transportation (+6,000), and air transportation (+6,000). Since February 2020, employment in couriers and messengers went up by 23.3% while declined by 22.8% and 20.1% in transit and ground passenger transportation, and air transportation, respectively, as per government data.

Such upbeat data makes iShares Transportation Average ETF (IYT - Free Report) a timely investment. The fund has a Zacks Rank #2 with a Medium risk outlook.


About 53,000 jobs were created in the sector in the month. Gains were palpable in both durable(+30,000) and non-durable goods (+23,000). Obviously, such positive data makes us keep a close watch on Industrial Select Sector SPDR ETF (XLI - Free Report) .

The underlying Industrial Select Sector Index includes companies from the following industries: industrial conglomerates; aerospace & defense; machinery; air freight & logistics; road & rail; commercial services & supplies; electrical equipment; construction & engineering; building products; airlines; and trading companies & distributors. The fund has a Zacks ETF Rank #1.

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