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Worst U.S. Job Market: Most & Least Hurt Sector ETFs

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The U.S. jobs report for the month of April came in as the worst since the Depression era due to the coronavirus-led lockdown that led to business shutdowns. The U.S. economy lost 20.5 million jobs in April, less than market expectations of 21.5 million decline, and after falling by 870,000 in March. It is the largest drop ever, taking total employment to 131 million, its lowest level since February 2011.

Overall, the unemployment rate was 14.7% in the month, the highest rate and the largest over-the-month increase in history. However, the unemployment rate came in lower than market expectation of 16%. April’s unemployment rate surpassed the post-war record of 10.8%, financial crisis peak of 10% (recorded in October 2009) but was short the high of 24.9% recorded in the Great Depression.

Average hourly earnings for all employees on private nonfarm payrolls increased $1.34 to $30.01 in April 2020. Average hourly earnings of private-sector production and nonsupervisory employees grew by $1.04 to $25.12 in April.

Below, we have highlighted sectors and related ETFs that have been the most and least hurt amid the crisis.

Least-Hurt

Mining – SPDR SP Metals Mining ETF (XME - Free Report)

Mining lost 46,000 jobs in April, with most of the decline occurring in support activities for mining (negative 33,000). With the gold mining sector looking pretty upbeat, investors may count on this segment for expected recovery (see all materials ETFs here).

Financials – Financial Select Sector SPDR Fund (XLF - Free Report)

Employment in financial activities fell by 262,000 over the month, with real estate and rental and leasing being the hardest hit (-222,000).

Construction – Invesco Dynamic Building & Construction ETF (PKB - Free Report)

Construction employment dropped by 975,000 in April, with specialty trade contractors (-691,000) being the most affected. Job losses also occurred in construction of buildings (-206,000).

Most-Hurt

Leisure and Hospitality – Invesco Dynamic Leisure And Entertainment ETF (PEJ - Free Report)

Employment in leisure and hospitality fell by 7.7 million, or 47%. Food services and drinking places (-5.5 million) was the most hurt in the sector, having accounted for about 75% of the total decline. Employment also plunged in the arts, entertainment, and recreation industry (-1.3 million) and in the hotel industry (-839,000) (see all Consumer Discretionary ETFs here).

Healthcare – Health Care Select Sector SPDR Fund (XLV - Free Report)

Employment declined by 2.5 million in education and health services in April. Offices of dentists (-503,000), physicians (-243,000), and other health care practitioners (-205,000) led the decline. Employment in private education fell by 457,000 over the month.

Retail – VanEck Vectors Retail ETF (RTH - Free Report)

In April, retail employment fell by 2.1 million. Job losses occurred in clothing and clothing accessories stores (-740,000), motor vehicle and parts dealers (-345,000), miscellaneous store retailers (-264,000), and furniture and home furnishings stores (-209,000). However, warehouse clubs and supercenters created 93,000 jobs. 

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