Downbeat August jobs data puts focus on these sector ETFs

The U.S. economy added 22,000 jobs in August 2025, lower than an upwardly revised 79,000 in July and market forecasts of 75,000, as quoted on tradingeconomics. The data reinforces the softness in the labor market.

Jobs data for June were revised down by 27,000 and the change for July was revised up by 6,000. With these revisions, previously-reported employment data in June and July combined got cut by 21,000. The unemployment rate at 4.3% changed little in August, per the government data.

Job growth was mainly noticed in sectors such as health care (+31,000) and social assistance (+16,000). Job losses also pronounced in wholesale trade (12,000) and manufacturing (12,000).

Below, we have highlighted some of the sectors and their related exchange-traded funds (ETFs) that may drag investors’ attention in light of downbeat August jobs data.

Winner

Healthcare – Health Care Select Sector SPDR ETF (XLV)

Health care added 31,000 jobs in August, below the average monthly gain of 42,000 over the past one year. Employment continued to go up over the month in ambulatory health care services (+13,000), nursing and residential care facilities (+9,000), and hospitals (+9,000).

Zacks Rank #1 (Strong Buy) Health Care Select Sector SPDR ETF (XLV) can be played to tap the moderate momentum. The fund has 30% exposure to the pharma industry, followed by 22.32% exposure to the healthcare providers & services industry, about 22% focus on Health Care Equipment & Supplies, 17.1% focus on the biotech sector and 8.7% focus on the life sciences tools & services. The ETF XLV gained 6.9% over the past month.

Loser

Manufacturing – Industrial Select Sector SPDR ETF (XLI)

Manufacturing employment changed little in August (-12,000) but is down by 78,000 over the year. This indicates that the sector is in a vulnerable position.

Zacks Rank #1 The Industrial Select Sector SPDR Fund (XLI) includes companies from the following industries: industrial conglomerates; aerospace & defense; machinery; air freight & logistics; road & rail; commercial services & supplies; electrical equipment; construction & engineering; building products; airlines; and trading companies & distributors.

General Electric (6.51%), RTX Corp (4.59%) and Caterpillar Inc (4.28%) are the top three stocks of the fund.  The fund charges 8 bps in fees. The ETF XLI has been flat (up only 0.2%) over the past month.

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