News

The U.S. economy added 353,000 for the month, much better than the Dow Jones estimate for 185,000 (as quoted on CNBC), the Labor Department’s Bureau of Labor Statistics reported Friday. The unemployment rate held at 3.7%, against the estimate for 3.8%.

Wage growth also showed strength, as average hourly earnings increased 0.6%, double the monthly estimate. On a year-over-year basis, wages inched up 4.5%, well above the 4.1% forecast. The wage gains came amid a decline in average hours worked, down to 34.1, or 0.2 hour lower for the month. In January, average hourly earnings of private-sector production and nonsupervisory employees inched up 0.4%.

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

Sectors in Focus

Healthcare

Employment in the healthcare industry increased by 70,000 in January, with gains in ambulatory health care services (+33,000), hospitals (+20,000), and nursing and residential care facilities (+17,000). Job growth in health care averaged 58,000 per month in 2023.

Health Care Select Sector SPDR ETF XLV can be played to tap the moderate momentum.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 U.S. Headquartered in Nashville, TN, it operates hospitals and related health care entities.

Retail

Employment in retail rose by 45,000. However, the space has shown little net growth since early 2023. Over the month, general merchandise retailers added 24,000 jobs, while electronics and appliance retailers lost 3,000 jobs.

The data makes Zacks Rank #2 SPDR S&P Retail ETF XRT a timely investment. The Zacks Rank #1 (Strong Buy) American Eagle Outfitters AEO is a specialty retailer of casual apparel, accessories and footwear for men and women aged 15–25 years.

Manufacturing

Employment in manufacturing edged up in January (+23,000), with job gains in chemical manufacturing (+7,000) and printing and related support activities (+5,000). Manufacturing experienced little net job growth in 2023.

Investors can keep a watch on the price movement of Zacks Rank #2 Industrial Select Sector SPDR ETF XLI. As far as the stock is concerned, Zacks Rank #2 North American Construction Group NOA is a top bet. The company provides heavy construction and mining services primarily in Canada. It offers services to large oil, natural gas and resource companies.

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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.