2 ETFs, Sector Stocks Gain Despite Weak June Employment Data

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

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

After these revisions, employment in April and May is a combined 111,000 lower than previously reported. Average monthly payroll growth this year was 222,000, compared with 251,000 in 2023 and 377,000 in 2022.

In June, the largest number of jobs were created in the public administration sector (70,000), mainly in local government, excluding education (34,000), and in state administration (26,000); health care (49,000); social assistance (34,000) and construction (27,000).

In June, average hourly earnings for all nonfarm payroll workers rose 0.3% to $35.00. Over the past 12 months, average hourly earnings have risen 3.9%. In June, average hourly earnings for production and nonsupervisory private-sector workers rose 0.3% to $30.05.

Below, we have highlighted some sectors where we are likely to see smooth trading in the coming days, based on June employment data.

Sectors in focus

Healthcare

Health care added 49,000 jobs in June, down from the average monthly gain of 64,000 over the past 12 months. Employment rose in June in outpatient health care services (+22,000) and hospitals (+22,000).

Zacks Rank #1 (Strong Buy) Healthcare Select Sector SPDR ETF XLV can be used to take advantage of the moderate pace. HCA Healthcare HCA, 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

June saw a noticeable increase in construction employment (+27,000), higher than the average monthly increase of 20,000 in the previous 12 months.

Investors can track price movements Invesco Dynamic Building & Construction ETF GDP. The core Dynamic Building & Construction Intellidex index consists of stocks of U.S. construction companies.

When it comes to stocks, Zacks Rank #2 MasTec You can play MTZ. It is a leading construction company operating primarily in North America.

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