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2 Sector ETFs & Stocks to Gain Despite Soft June Jobs Data

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The U.S. economy added 206,000 jobs in June 2024, slightly below a downwardly revised 218,000 in May and above forecasts of 190,000. Data for May was revised sharply lower from an initial 272,000 and the April reading was also revised down by 57,000 to 108,000.

Both the unemployment rate, at 4.1%, and the number of unemployed people, at 6.8 million, changed little in June. These measures are higher than a year earlier, when the jobless rate was 3.6% and the number of unemployed people was 6.0 million.

With these revisions, employment in April and May combined is 111,000 lower than previously reported. The average monthly payroll growth for this year has been 222,000, compared to 251,000 in 2023 and 377,000 in 2022.

In June, most job gains occurred in government (70,000), mostly local government, excluding education (34,000) and in state government (26,000); health care (49,000); social assistance (34,000); and construction (27,000).

In June, average hourly earnings for all employees on private nonfarm payrolls rose by 0.3% to $35.00. Over the past 12 months, average hourly earnings have increased by 3.9%. In June, average hourly earnings of private-sector production and nonsupervisory employees increased 0.3% to $30.05.

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.

Sectors in Focus

Healthcare

Health care added 49,000 jobs in June, lower than the average monthly gain of 64,000 over the past 12 months. In June, employment rose in ambulatory health care services (+22,000) and hospitals (+22,000).

The Zacks Rank #1 (Strong Buy) Health Care Select Sector SPDR ETF (XLV - Free Report) can be played to tap the moderate momentum. HCA Healthcare (HCA - Free Report) , which has a Zacks Rank #2 (Buy) deserves a mention. It is the largest non-governmental operator of acute care hospitals in the United States.

Construction

In June, employment in construction (+27,000) saw notable growth, higher than the average monthly gain of 20,000 over the prior 12 months.

Investors can keep a watch on the price movement of Invesco Dynamic Building & Construction ETF (PKB - Free Report) . The underlying Dynamic Building & Construction Intellidex Index is comprised of stocks of U.S. building and construction companies.

As far as the stock is concerned, Zacks Rank #2 MasTec (MTZ - Free Report) can be played. It is a leading infrastructure construction company operating mainly throughout North America.


 

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