Smart Investors Are Watching These 3 ETFs After Surprise Jobs Data Beat

A better-than-expected U.S. jobs report for March brought renewed focus on some sector-specific exchange-traded funds, or ETFs.

Healthcare, transportation, and food retail are specific examples of how the labor market’s resilience is presenting selective opportunity in the face of wider skepticism about inflation and trade tensions.

The American economy created 228,000 jobs in March, well exceeding Wall Street’s forecast of 140,000 and exceeding the 12-month average of 158,000, as reported in data issued by the U.S. Bureau of Labor Statistics. Hiring was strongest in healthcare, transportation and warehousing, and food and beverage stores—categories in which ETF exposure may be timely for investors.

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Health care remained a bedrock of job growth, adding 54,000 jobs during March. This was consistent with the industry’s 12-month average. Employment additions were dispersed across ambulatory services (+20,000), hospitals (+17,000), and nursing and residential care facilities (+17,000).

The Health Care Select Sector SPDR ETF XLV is one possible beneficiary of this trend. The fund is diversified with about 29.26% exposure to pharmaceuticals, 23.35% to healthcare providers and services, 22.39% to healthcare equipment and supplies, and some exposure to biotech (16.33%) and life sciences tools (8.7%).

Transportation and warehousing employment increased by 23,000 jobs, more than twice the 12-month average increase of 12,000. The majority of the gain was in couriers and messengers (+16,000) and truck transportation (+10,000), offset in part by a loss in warehousing and storage employment (-9,000).

The SPDR S&P Transportation ETF XTN, which follows a broad group of U.S. transportation companies such as airlines, trucking, and logistics companies, may experience investor demand in light of better labor market trends within the sector. Fedex Corp. FDX, Joby Aviation Inc JOBY, and JetBlue Airways Corp JBLU are among its top holdings.

Retail employment rose by 24,000 jobs in March, with food and beverage retailers adding 21,000 positions as workers returned from a strike. While retail hiring has remained largely flat over the past year, the March boost provides a short-term lift.

Invesco Food & Beverage ETF PBJ provides access to 30 companies that produce and distribute food and beverage items. PBJ has 62 basis points of fee expense and the prospect of offering a defensive sector bet under conditions of macro uncertainty.

Though the jobs report is a sign of strength, it has qualifications. Unemployment expanded to 4.2%, just above the forecast 4.1%, because the labor force participation rate increased. Also, the mean hourly earnings expanded 0.3% from last month, but the year-over-year wage growth slowed to 3.8%, the lowest since July of 2024.

The positive news comes amid increased economic anxiety, with recently introduced tariffs by the Trump administration and retaliatory measures from China fueling worries over inflation and a slowdown.

Nevertheless, the resilience of the labor market in the core sectors provides a silver lining for shareholders. With specific exposure, ETFs such as XLV, XTN, and PBJ offer a method to ride sectoral momentum while weathering more general macroeconomic headwinds.

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