Yahoo News 4 Sector ETFs & Stocks to Bet on Superb May Jobs Data
The U.S. economy added 339,000 jobs in May 2023, the maximum in four months, and breezing past market forecasts of 190,000. Figures for March and April were revised up, bringing employment 93,000 higher than previously reported. Figures hint at a tight labor market, with employment rising by an average of 314,000 per month so far this year.
In May, average hourly earnings for all employees on private nonfarm payrolls increased by 11 cents, or 0.3%, to $33.44. Over the past 12 months, average hourly earnings have risen 4.3%. In May, average hourly earnings of private-sector production and nonsupervisory employees grew by 13 cents, or 0.5% to $28.75.
The average workweek for all employees on private nonfarm payrolls dropped by 0.1 hour to 34.3 hours in May. In manufacturing, the average workweek was same at 40.1 hours, and overtime increased by 0.1 hour to 3.0 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was 33.8 hours.
Below, we have highlighted some of the sectors that will likely see smooth trading in the days ahead in light of the May jobs data.
Sectors in Focus
Healthcare
Employment in the healthcare industry increased by 52,000 in May, in line with the average monthly gain of 50,000 over the past one year. Job gains occurred in ambulatory health care services (+24,000) and hospitals (+20,000). Employment continued to increase in nursing and residential care facilities (+9,000).
Health Care Select Sector SPDR ETF XLV can be played to tap the moderate momentum. HCA Healthcare HCA, which has a Zacks Rank #3 (Hold) deserves a mention. It is the largest non-governmental operator of acute care hospitals in the U.S. Headquartered in Nashville, TN, it operates hospitals and related health care entities.
Leisure
Employment in leisure and hospitality rose by 48,000. Leisure and hospitality added an average of 77,000 jobs per month in the past one year. Employment in the industry remains below its pre-pandemic February 2020 level by 2.1%. Over the month, food services and drinking places added 33,000 jobs.
The data makes Invesco Dynamic Leisure and Entertainment ETF PEJ a timely investment. The Zacks Rank #1 (Strong Buy) Chipotle Mexican Grill CMG, together with its subsidiaries, operates quick-casual and fresh Mexican food restaurant chains. The stock could be a good pick in this category.
Construction
In May, employment in construction (+25,000), higher than with average monthly job growth (+17,000) in past one year. Job growth in heavy and civil engineering construction was 11,000 in May. Investors can keep a watch on the price movement of Invesco Dynamic Building & Construction ETF PKB.
As far as the stock is concerned, Zacks Rank #1 Dycom Industries DY is a top bet. It is a leading provider of specialty contracting services throughout the United States.
Transportation
Employment in transportation and warehousing rose by 24,000 in May. However, job growth in transportation and warehousing has shown no clear trend in recent months. Over the month, Transit and ground passenger transportation added 12,000 jobs, making up for a decline in the prior month.
In May, employment also increased in couriers and messengers (+8,000) and air transportation (+3,000) were also notable. Zacks Rank #2 (Buy) SPDR S&P Transportation ETF XTN can thus be considered for a play. Airlines company American Airlines AAL has a Zacks Rank #3.
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Chipotle Mexican Grill, Inc. (CMG) : Free Stock Analysis Report
HCA Healthcare, Inc. (HCA) : Free Stock Analysis Report
American Airlines Group Inc. (AAL) : Free Stock Analysis Report
Dycom Industries, Inc. (DY) : Free Stock Analysis Report
Health Care Select Sector SPDR ETF (XLV): ETF Research Reports
Invesco Dynamic Building & Construction ETF (PKB): ETF Research Reports
Invesco Dynamic Leisure and Entertainment ETF (PEJ): ETF Research Reports
SPDR S&P Transportation ETF (XTN): ETF Research Reports
