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4 Sector ETFs to Sizzle on Solid July Jobs Data

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The U.S. economy added 943,000 jobs in July 2021, the maximum in 11 months and above market expectations of 870,000. The job gains followed a similar increase in June (+938,000).

The U.S. unemployment rate declined to 5.4% in July 2021, below market expectations of 5.7%. The number of unemployed persons dropped by 782,000 to 8.7 million. These measures have improved substantially from their highs at the end of the February-April 2020 recession.

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


Last month, leisure and hospitality employment grew by 380,000, thanks mainly to the gradual reopening of the economy. Gains mainly occurred in food services and drinking places (+253,000). Job gains also happened in accommodation (+74,000), and in arts, entertainment, and recreation (+53,000). Employment in leisure and hospitality is still down by 1.7 million, or 10.3% year over year.

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 High risk outlook.

Transportation and Warehousing

Last month, retail employment grew by 50,000. Job growth occurred in transit and ground passenger transportation (+19,000), warehousing and storage (+11,000), and couriers and messengers (+8,000). Employment in transportation and warehousing has grown by 534,000 since April 2020.

The data makes iShares U.S. Transportation ETF (IYT - Free Report) a timely investment. The fund has a Zacks Rank #2 with a High risk outlook.

Health Care

Health care added 37,000 jobs in the month. The July job gains mainly occurred in ambulatory health care services (+32,000) and hospitals (+18,000). Health care employment is still lower by 502,000 than in February 2020.

The fund iShares U.S. Healthcare Providers ETF (IHF - Free Report) should thus benefit. The index of the fund looks to track stocks of health maintenance organizations, hospitals, clinics, dentists, opticians, nursing homes, etc. The fund has a Zacks Rank #3 (read: UnitedHealth's Solid Q2 Earnings Put These ETFs in Focus).


About 27,000 jobs were created in the sector in the month. Gains were palpable in durable goods (+7,000). 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.