The U.S. economy added 850,000 jobs in June 2021 (after rising 559,000 in May), beating market expectations of a rise of 700,000 thanks to easing business restrictions amid reopening of economies, falling coronavirus infection rates and vaccine distribution from multiple makers.

The jobs market represented the strongest employment growth in 10 months. Still, nonfarm payroll employment is down by 4.4% from its pre-pandemic level in February 2020. Average hourly earnings increased 0.3%, below the forecast of 0.4%. The unemployment rate rose to 5.9% versus the 5.6% estimate.

Below, we have highlighted some of the sectors that will likely see smooth trading in the days ahead in light of the June jobs data.

Leisure

Last month, leisure and hospitality employment grew by 343,000, thanks mainly to the increasing reopening of the economy. Gains mainly occurred in food services and drinking places (+194,000). Job gains were also logged in accommodation (+75,000) and in amusements, gambling, and recreation (+74,000). Employment in leisure and hospitality is still down by 12.9% from February 2020.

The data makes Invesco Dynamic Leisure and Entertainment ETF PEJ a timely investment. The fund has a Zacks Rank #3 (Hold) with a Medium risk outlook. 

Retail


Last month, retail employment grew by 67,000, but employment is down by 1.9%, since February 2020. Job growth in clothing and clothing accessories stores (+28,000), general merchandise stores (+25,000), miscellaneous store retailers (+13,000), and automobile dealers (+8,000) was partially offset by job losses in food and beverage stores (-13,000) and health and personal care stores (-7,000).

The data makes SPDR S&P Retail ETF XRT a timely investment. The fund has a Zacks Rank #2 (Buy) with a Medium risk outlook.

Mining

Employment in mining rose by 10,000 in June, reflecting an uptick in support activities for mining. Mining employment is now down by 110,000 since the peak in January 2019. SPDR S&P Metals & Mining ETF XME can thus be considered for a play.

Manufacturing

Employment in manufacturing (+15,000) was moderate in June. Within the industry, job gains in furniture and related products (+9,000), fabricated metal products (+6,000), and primary metals (+3,000) were notable. Employment in manufacturing is down by 481,000 from its level in February 2020. Industrial Select Sector SPDR ETF XLI has a Zacks Rank #1 (Strong Buy). 

Transportation

Employment in transportation and warehousing was decent in June (+11,000). Employment gains in warehousing and storage (+14,000), air transportation (+8,000), and truck transportation (+6,000) were noteworthy. Since February 2020, employment in transportation and warehousing is down by 94,000. SPDR S&P Transportation ETF (XTN) has a Zacks Rank #2 with a High risk outlook (read: ETFs in Focus Post FedEx’s Robust Q4 Earnings).


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Industrial Select Sector SPDR ETF (XLI): ETF Research Reports

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SPDR S&P Metals & Mining

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.

Winners

Leisure

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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