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4 Sector ETFs to Benefit from Strong April Jobs Data

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The April jobs report showed a substantial increase in nonfarm payrolls, with 253,000 new jobs added, surpassing Wall Street estimates of 180,000. The unemployment rate dropped to 3.4%, matching the lowest level since 1969, while average hourly earnings rose 0.5% for the month, exceeding the estimated 0.3% and marking the largest monthly increase in a year, per a CNBC article.

Yearly wages also rose by 4.4%, surpassing the anticipated 4.2% increase. These figures increase the possibility of the Federal Reserve deciding to raise interest rates in June, although the markets only had a low probability of this occurring after the jobs report.

Notably, employment figures for February and March were adjusted downwards, resulting in a combined decrease of 149,000 from previous reports. Specifically, the employment change for February was revised down by 78,000, and the change for March was revised down by 71,000.

Given this optimistic economic outlook, investors can look to the following sector ETFs to capitalize on the positive jobs data:

Health Care

April saw an increase of 40,000 jobs in the health care sector compared with the average monthly gain of 47,000 over the past six months, with consistent growth in ambulatory health care services, nursing and residential care facilities, and hospitals. The Health Care Select Sector SPDR Fund (XLV - Free Report) is an ETF that provides exposure to the health care sector, including pharmaceuticals, biotechnology, and health care providers.

Leisure and Hospitality

Leisure and hospitality continued its upward trend in April, adding 31,000 jobs, primarily in food services and drinking places. This industry has been adding an average of 73,000 jobs per month over the past six months. Employment in this industry remains below its pre-pandemic February 2020 level by 2.4%.The Invesco Dynamic Leisure and Entertainment ETF (PEJ - Free Report) is a fund that focuses on companies in the leisure and hospitality sector, offering investors a way to benefit from its growth.

Financial Activities

Despite the ongoing regional banking crisis, the financial activities sector increased by 23,000 jobs in April, with gains in insurance carriers and related activities (+15,000), as well as real estate (+9,000). Employment in financial activities has been in line with the past-three-month trend of this year. The Financial Select Sector SPDR Fund (XLF - Free Report) is an ETF that provides exposure to the financial sector, including banks, insurance companies, and real estate firms.


Employment in mining, quarrying, and oil and gas extraction increased by 6,000 in April and has risen by 102,000 since a recent low in February 2021. Nearly all of the April job gain occurred in support activities for mining.SPDR S&P Metals & Mining ETF (XME - Free Report) can thus be considered for a play.

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