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April Jobs Data Mixed Bag: 3 Sector ETFs & Stocks to Gain


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U.S. employers added 164,000 new jobs in April, after an upwardly revised 135,000 job gains in March and falling short of market expectations of 192,000 jobs. The change in total nonfarm payroll employment for February was revised down to 324,000 from 326,000.

After revisions, combined job gains in February and March were 30,000 more than previously reported and have averaged 208,000 over the last 3 months (read: Why Fear March Jobs Data? These ETFs May Gain Ahead ).

On a positive note, the unemployment rate of 3.9% in America has dropped to its lowest level since 2000 .  The rate declined from 4.1% noted in March. In April, average hourly earnings for all employees on private nonfarm payrolls increased 4 cents to $26.84. On a year-over-year basis, average hourly earnings increased by 67 cents or 2.6%.

While some sectors gained, employment changed sequentially in major industries.

Wining Sector ETFs

Against this backdrop, investors should bet on ETFs that are the largest beneficiaries of the April jobs data. Below, we have highlighted some of these that will likely see smooth trading in the days ahead.

Manufacturing

Industrial Select Sector SPDR Fund XLI

The manufacturing sector added 24,000 jobs in April. Over the past year, manufacturing has created 245,000 jobs. Most of the gains came from the durable goods component, while machinery and fabricated metal products created 8,000 and 4,000 jobs, respectively.

Agreed, the fund is susceptible to the ongoing trade dispute between the United States and China. But the tariffs are yet to be enacted and both countries could come to a negotiation before derailing the global growth momentum.

Kennametal Inc. KMT

The Zacks Rank #2 (Buy) company is a leading global supplier of tooling, engineered components and advanced materials consumed in production processes. It comes from a top-ranked Zacks industry (top 43%).

Health Care

First Trust Health Care AlphaDEX Fund FXH

Jobs in the health care sector grew by 24,000 in the month, wherein ambulatory health care services and hospitals gained 17,000 and 10,000 jobs. Per tradingeconomics, health care created 305,000 jobs over the year (read: Don't Sell in May and Go Away: Follow These ETF Strategies ).

Acadia Healthcare Company Inc. ACHC

The Zacks Rank #2 company provides inpatient behavioral health care services. The company provides psychiatric and chemical dependency services. It belongs to a top-ranked Zacks Industry (top 17%).

Mining

SPDR S&P Metals and Mining ETF XME

As per tradingeconomics, about 8,000 jobs were created in the mining sector in the month. Since a recent low in October 2016, mining has managed to add 86,000 jobs (read: Trump Tariffs: ETF Winners & Losers ).

Hi-Crush Partners LP HCLP

The Zacks Rank #2 company is in the production of monocrystalline sand, a specialized mineral that is used as a proppant to enhance the recovery rates of hydrocarbons from oil and natural gas wells. It hails from a top-ranked Zacks Industry (top 43%).

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SPDR-INDU SELS (XLI): ETF Research Reports

SPDR-SP MET&MIN (XME): ETF Research Reports

FT-HEALTH CARE (FXH): ETF Research Reports

Kennametal Inc. (KMT): Free Stock Analysis Report

Acadia Healthcare Company, Inc. (ACHC): Free Stock Analysis Report

Hi-Crush Partners LP (HCLP): Free Stock Analysis Report

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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.



This article appears in: Investing , ETFs
Referenced Symbols: XLI , XME , FXH , KMT , ACHC


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