Health Care Fund Gains 11% While Sector Loses 28,000 February Jobs
Health Care Select Sector SPDR Fund gained 11% over six months while the U.S. health care sector shed 28,000 jobs in February, pushing unemployment to 4.4%. Losses, partly due to Kaiser Permanente strikes, raise concerns of spillover into broad-market ETFs.
1. February Employment Weakness
The U.S. economy lost 92,000 jobs in February, with the unemployment rate rising to 4.4%. The health care sector accounted for a surprising 28,000 of those losses, marking one of the largest monthly declines on record for the industry.
2. Impact of Kaiser Permanente Strikes
A significant portion of the health care job declines stemmed from strike actions by Kaiser Permanente employees, highlighting labor tensions within hospital and insurance operations and their direct effect on payroll figures.
3. ETF Performance Amid Sector Slump
Despite sector employment weakness, the Health Care Select Sector SPDR Fund posted an 11% return over the past six months. The fund’s holdings include major pharmaceutical and biotech names such as Eli Lilly, Johnson & Johnson and AbbVie.
4. Broader Market Implications
Health care and social assistance form a key component of major indexes including the S&P 500 and total market ETFs. Continued employment declines in health care could weigh on broad-market ETF returns if the sector’s stability erodes further.