Sector ETFs To Win On Strong November Job Data (Revised)

U.S. employers added 228,000 new jobs in November, ahead of market expectations of 200,000. The data however fell short of the downwardly revised 244,000 in October. After revisions, job growth has averaged 170,000 for the last three months.

Solid job gains in the professional and business services, manufacturing, and health care sectors pushed up the total number, as per trading economics. The unemployment rate was 4.1% — about a 17-year low – as U.S. employers recorded more-than-expected hiring. November marked the 86th straight month of gains, the lengthiest on record.

However, wage growth remained moderate, having grown only 2.5% on a year-over-year basis. Investors should note that there will likely be changes in the sector’s performance post solid job data. Below we highlight a few sector ETFs that registered decent job growth in the month and will thus be in focus ahead.

Likely Winners

iShares U.S. Healthcare Providers ETF (IHF – Free Report)

Jobs in the health care sector grew by 30,000 in November. As per tradingeconomics, “most of the gain occurred in ambulatory health care services (+25,000), which includes offices of physicians and outpatient care centers.” Job growth per month in health care has averaged 24,000 thus far in 2017 compared with the industry’s average monthly job growth of 32,000 in 2016. This indicates the sector is in a decent position for the last two years.

The fund, which gives exposure to health maintenance organizations, hospitals, clinics, dentists, opticians and nursing homes rehabilitation, has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.

Industrial Select Sector SPDR ETF (XLI – Free Report)

In November, the manufacturing sector generated 31,000 jobs. Within the industry, areas like manufacturing (up 8,000), fabricated metal products (up 7,000) and plastics and rubber products (up 4,000) deserve special mention, as per Tradingeconomics. After hitting a low in November 2016, manufacturing employment has grown 189,000.