Sector ETFs to Win Despite Downbeat April Jobs Report

The U.S. economy added 266,000 jobs in April 2021, after a downwardly revised 770,000 rise in March and below market expectations of a rise of 978,000 as employers face worker shortage. Some analysts are of the view that increased unemployment benefits are keeping people at home instead of taking jobs.

The U.S. unemployment rate dropped to 6.1% in April 2021. Dow Jones estimates had been of an unemployment rate of 5.8%, per a CNBC article. In April, nonfarm employment was down by 8.2 million, or 5.4%, from its pre-pandemic level in February 2020.

Investors may want to bet on ETFs that are the largest beneficiaries of job gains. Below, we have highlighted some of these that are likely to win in the days ahead.



Last month, leisure and hospitality employment grew by 331,000, thanks mainly to the increasing reopening of the economy. Gains mainly occurred in food services and drinking places (+187,000). Job gains were also noticed in amusements, gambling and recreation (+73,000), and in accommodation (+54,000). Employment in leisure and hospitality was still down by 2.8 million, or 16.8% since February 2020 or the pre-pandemic period.

The data makes Invesco Dynamic Leisure and Entertainment ETF PEJ a timely investment. Other wining ETFs could be AdvisorShares Restaurant ETF (EATZ), AdvisorShares Hotel ETF (BEDZ) and VanEck Vectors Gaming ETF (BJK) (read: Time for Restaurant ETF on Solid Q1 Earnings, Fundamentals?).

Financials – Real Estate

Employment in financial activities gained by 19,000 over the month, with most of the gains coming from in real estate, and rental and leasing (+17,000). Employment in financial activities is down by 63,000 since February 2020. In this light, Real Estate Select Sector SPDR ETF XLRE came across as a winner (read: ETF Strategies to Win From Likely Rise in Inflation).

Transportation – Airlines

Within transportation and warehousing, employment in couriers and messengers dropped by 77,000 in April but has gained by 126,000 since February 2020. Notably, air transportation added 7,000 jobs over the month. Such data makes U.S. Global Jets ETF JETS a timely investment. The fund has a Zacks Rank #3 with a High risk outlook (read: 5 ETF Strategies to Follow Warren Buffett’s Vision).

Manufacturing – Durable Goods

About 18,000 jobs were lost in the sector in the month. Though there were job losses in motor vehicles and parts (-27,000) and in wood products (-7,000), job gains in miscellaneous durable goods manufacturing (+13,000) and chemicals (+4,000) were also noticed. Employment in manufacturing is 515,000 lower than in February 2020. Such data makes us keep a close watch on Industrial Select Sector SPDR ETF XLI for gains.

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SPDR-INDU SELS (XLI): ETF Research Reports
US GLOBAL JETS (JETS): ETF Research Reports
INVS-DYN LE&EN (PEJ): ETF Research Reports
SPDR-RE SELS (XLRE): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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