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5 Sector ETFs To Win Despite Weak November Jobs Data

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Nonfarm payrolls increased by 210,000 in November following a gain of 546,000 the previous month. The number fell shy of Wall Street expectations of 573,000, per CNBC. The job gains were the least since a 306 thousand decline in December 2020. The unemployment rate dropped 0.4 percentage point to 4.2%.

Below, we have highlighted some of the sectors that will likely see smooth trading in the days ahead in light of the November jobs data.


Employment in transportation and warehousing was decent in November (+50,000). Employment gains in warehousing and storage (+9,000) and couriers and messengers (+27,000) were noteworthy. Since February 2020, employment in transportation and warehousing is up by 210,000. SPDR S&P Transportation ETF (XTN has a Zacks Rank #2 with a High risk outlook.


Employment in construction (+31,000) was upbeat in October, after gains of a similar magnitude in the past two months. In November, Within the industry, job gains in specialty trade contractors (+13,000), construction of buildings (+10,000), and heavy and civil engineering construction (+8,000) were notable. Construction employment is 115,000 below its February 2020 level. Invesco Dynamic Building & Construction ETF (PKB - Free Report) has a Zacks Rank #3 (Hold).


Employment in manufacturing (+31,000) was also upbeat. Within the industry, job gains in miscellaneous durable goods manufacturing (+10,000) and fabricated metal products (+8,000) were prominent. Employment in manufacturing decreased by 253,000 from its level in February 2020. Industrial Select Sector SPDR ETF (XLI - Free Report) has a Zacks Rank #1 (Strong Buy).


Employment in financial activities continued to rise in November (+13,000) and is 30,000 above its February 2020 level. Job growth occurred in securities, commodity contracts, and investments in November (+9,000). If the Fed speeds up the policy tightening ahead on inflation concerns, the sector may gain more strength. Financial Select Sector SPDR ETF (XLF - Free Report) has a Zacks Rank #1.


Last month, leisure and hospitality employment job gains were +23,000, thanks mainly to the increasing reopening of the economy.Leisure and hospitality has added 2.4 million jobs thus far in 2021, but employment in the industry is still down by 1.3 million, or 7.9 percent, since February 2020.

If the President Biden doesn’t enact further lockdowns on the Omicron strain of virus fear, the reopening-friendly sector may create more jobs in the key holiday season. 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.