The technology sector has often proved to be a resilient one, weathering economic storms better than most others. But the most recent unemployment report showed that there might be some speed bumps ahead for technology exchange traded funds.
Although many companies aren’t doing much hiring these days, it’s a worrying sign that technology companies have been slow to resume hiring. It raises questions as to whether the sector has the strength to propel America’s job growth in the coming years.
Catherine Rampell for The New York Times reports that government labor reports released this year, including the most recent one, showed a decline in opportunities in high-skill areas like computer systems design and internet publishing. Likewise, computer scientists, systems analysts and computer programmers all had unemployment rates of around 6% in the second quarter of this year.
Some only see this pause in hiring activity as a blip. JeeYeon Park for CNBC reports that overall, the tech industry is down about 7% so far this year, but corporate spending on technology may just be enough to right the ship.
According to the ETF Analyzer, most domestic tech ETFs are well below their long-term trend lines, with the exception of First Trust Technology AlphaDEX (NYSEARCA:FXL), which is up 5% in the last 10 days.
Tisha Guerrero contributed to this article.