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4 Sector ETFs to Play Upbeat September Jobs Data

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The U.S. economy added 263,000 jobs in September 2022, the least since April of 2021 but higher than market forecasts of 250,000, per tradingeconomics. The reading indicated a decline from an average of 439K in the first eight months of the year, as high inflation and interest rates started to weigh on the economy. Still, the number hints at a a tight labor market with employment about 500,000 higher than its pre-pandemic level.

Despite the decline in jobs added in September, the unemployment rate dropped to 3.5%, while economists had projected it to be at 3.7%. In September, average hourly earnings for all employees on private nonfarm payrolls increased 0.3% to $32.46.

Over the past 12 months, average hourly earnings have increased by 5.0%. In September, average hourly earnings of private-sector production and nonsupervisory employees grew by 0.4% to $27.77.

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

Leisure

Last month, leisure and hospitality employment grew by 83,000, in line with the average monthly job gain over the first eight months of the year. Gains mainly occurred in food services and drinking places (+60,000). Employment in leisure and hospitality is still down by 6.7% from February 2020.

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.

Healthcare

Employment in the healthcare industry increased by 60,000 in September. Job gains occurred in hospitals (+28,000), and ambulatory health care services (+28,000). Employment in health care is down from its level in February 2020.  The Zacks Rank #1 (Strong Buy) fund Health Care Select Sector SPDR ETF (XLV - Free Report) can be played to tap the momentum.

Manufacturing

Employment in manufacturing (+22,000) was moderate in September. Within the industry, job gains in motor vehicles and parts (+8,000), fabricated metal products (+6,000), and electrical equipment and appliances (+3,000) were notable. Manufacturing has added an average of 36,000 jobs per month thus far in 2022. Industrial Select Sector SPDR ETF (XLI - Free Report) has a Zacks Rank #2 (Buy).

Construction

In September, employment in construction continued to rise (+19,000), in line with average monthly job growth in the first eight months of this year. Job growth in specialty trade contractors was 18,000 in September. Investors can keep a watch on the price movement of Invesco Dynamic Building & Construction ETF (PKB - Free Report) .

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