Today's June jobs report contained an intriguing data point that has highlighted some potential opportunities. While the 206,000 new jobs added came in higher than expected, a notable one-third of those positions (70,000) came from the government sector.
This surge in public sector hiring was far above the 49,000 average over the past year. It signals increased fiscal spending by state and local governments, which have been boosting their payrolls across various agencies and departments.
Regime Change At Federal Reserve?
The Fed just began the rollout of a new technology that'll "shake the US financial system".It'll likely go down in history as the biggest change to money since Western Union launched its "lightning lines" in the early days of the telegraph.
Here's everything you need to know (including three steps to take to profit).
While government hiring may not always be sustainable long-term, we think this indicates it could create potential tailwinds for certain industries that stand to benefit from this trend in the coming months. We have identified several sectors you might want to consider:
Construction
A ramp up in public construction projects for infrastructure like roads, bridges and buildings could drive demand for heavy construction firms, engineering companies, and construction material suppliers.
IT Consulting/Services
Expanding government operations may require technology upgrades and consulting support. Opportunities could arise in IT services, systems integration, cloud computing and cybersecurity providers.
Defense/Aerospace
Heightened government hiring could potentially be a precursor to increased future defense spending, benefiting military contractors, weapons manufacturers, aerospace companies and their supply chains.
Environmental Services
With more public funding available, various environmental agencies may initiate new clean energy projects, creating potential openings for environmental consulting firms.
Education
The hiring jump was concentrated in state/local governments which often includes staffing for education roles. This could positively impact companies providing educational materials, technologies and services.
Healthcare Services
If hiring extends to the public health sector like hospitals and care facilities, it could benefit healthcare service providers and medical suppliers.
Municipal Bonds
The employment surge signals increased spending needs for state/local governments, which may likely be debt financed. This creates potential opportunities in municipal bond funds and individual muni bond issues.
While the overall economic outlook remains fluid, identifying potential areas of strength allows you to proactively explore new investment opportunities aligned with emerging catalysts.
Sponsor |
Elon Musk: America to run out of energy by 2025? |