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5 Sector ETFs to Play Robust October Jobs Data

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The U.S. economy added 531,000 jobs in October 2021, the maximum in three months (after rising 194,000 in September), beating market expectations of a rise of 450,000 thanks to easing business restrictions amid the reopening of economies, falling coronavirus infection rates and employers’ offering of higher wages and more flexible hours.

Nonfarm employment is still down by 4.2 million from its pre-pandemic level. Labor shortage prevails even after federal government-funded unemployment benefits have expired and schools have reopened.

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.


Last month, leisure and hospitality employment grew by 164,000, thanks mainly to the increasing reopening of the economy. Gains mainly occurred in food services and drinking places (119,000). Job gains were also logged in accommodation (23,000). Employment in leisure and hospitality is still down by 8.2% from February 2020. The sector hauled in 2.4 million jobs thus far in 2021.

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.


Employment in manufacturing (+60,000) was upbeat in October. Within the industry, job gains in motor vehicles and parts (+28,000), fabricated metal products (+6,000), chemicals (+6,000), and printing and related support activities (+4,000) were notable. Employment in manufacturing decreased by 270,000 from its level in February 2020. Industrial Select Sector SPDR ETF (XLI - Free Report) has a Zacks Rank #1 (Strong Buy).


Employment in transportation and warehousing was decent in October (+54,000). Employment gains in warehousing and storage (+20,000), transit and ground passenger transportation (+16,000), air transportation (+9,000), and truck transportation (+8,000) were noteworthy. Since February 2020, employment in transportation and warehousing is up by 149,000. Employment in couriers and messengers decreased by 5,000 in October, after increasing in the prior three months. SPDR S&P Transportation ETF (XTN - Free Report) has a Zacks Rank #2 with a High risk outlook.


Last month, construction employment grew by 44,000, after an increase of 30,000 in September. Employment gains were palpable in nonresidential specialty trade contractors (+19,000), and in heavy and civil engineering construction (+12,000). Construction employment is 150,000 lower than its level in February 2020. The data makes Invesco Dynamic Building & Construction ETF (PKB - Free Report) a timely investment.


Employment in the healthcare industry increased by 37,000 in October. Job additions in home health care services (16,000) and nursing care facilities (12,000) were noticed. Employment in information is still down by 460,000 since February 2020. The Zacks Rank #1 fund Health Care Select Sector SPDR ETF (XLV - Free Report) can be played to tap the momentum.

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