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5 Sector ETFs That Show Promise After Superb January Jobs Data

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The United States economy added 517,000 jobs in January of 2023, beating market expectations of 187,000 and December’s gain of 260,000. The unemployment rate in the United States inched lower to 3.4% in January 2023, the lowest level since May 1969 and below market expectations of 3.6%.  The labor force participation rate edged higher to 62.4%.

In January, average hourly earnings for all employees on private nonfarm payrolls increased by 0.3% to $33.03. Over the past one-year, average hourly earnings have increased by 4.4%. In January, average hourly earnings of private- sector production and nonsupervisory employees grew by 7 cents, or 0.2% to $28.26.


Employment in leisure and hospitality rose by 128,000. Leisure and hospitality added an average of 89,000 jobs per month in 2022. Employment in the industry remains below its pre-pandemic February 2020 level by 2.9%. Over the month, food services and drinking places added 99,000 jobs, while employment continued to increase in accommodation which created 15,000 jobs. The data makes Invesco Dynamic Leisure and Entertainment ETF (PEJ - Free Report) a timely investment.


Employment in the healthcare industry increased by 58,000 in December. Job gains occurred in health care services (+30,000), hospitals (+11,000), and nursing and residential care facilities (+17,000). In 2022, health care added an average of 47,000 jobs per month. Health Care Select Sector SPDR ETF (XLV - Free Report) can be played to tap the momentum.


Employment in retail trade was again upbeat in January (+30,000) after a soft December. Job growth in retail trade averaged 16,000 per month in 2022. In January, retail job gains were notable in general merchandise retailers (+16,000) and in furniture, home furnishings, electronics, and appliance retailers (+7,000). SPDR S&P Retail ETF (XRT - Free Report) outlook deserves a look.


In January, employment in construction (+25,000), in line with average monthly job growth (+22,000) in 2022. Job growth in specialty trade contractors was 22,000 in January. Investors can keep a watch on the price movement of Invesco Dynamic Building & Construction ETF (PKB - Free Report) .


Employment in transportation and warehousing rose by 23,000 in January, the same as the industry's average monthly gain in 2022. Over the month, employment in support activities for transportation increased by 7,000. SPDR S&P Metals & Mining ETF (XME - Free Report) can thus be considered for a play.

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