Hiring Demand in the S&P 500 Healthcare sector has been growing at 0.8% a month on average since the bull market started in March. This is twice as fast as National Hiring Demand growth for "Healthcare Practitioners and Technical Occupations", the largest occupational group of healthcare workers tracked by the Bureau of Labor Statistics.
The XLV 'exchange traded fund' (ETF) which mimics the performance of the S&P500 Healthcare Sector Index has grown at an impressive 2.8% a month since March as well.
| Sector | OCT 2005 to DEC 2007 26 months | JAN 2008 to FEB 2009 | MARCH 2009 to NOV 2009 |
|---|---|---|---|
| Occupation 290000 Healthcare Practitioners and Technical | 2.4% | -2.1% | 0.4% |
| Occupation 310000 Healthcare Support | 2.1% | -1.4% | 2.1% |
| S&P 500 Healthcare Companies Hiring Demand Indicators | 2.4% | -1.9% | 0.8% |
| S&P 500 Healtchcare Exchange Traded Fund XLV | 0.6% | -2.1% | 2.8% |
It seems, however, that the XLV ETF is only "catching up" to where it should have been. The healthcare sector is one of the only sectors to have resisted the recession, and the performance of publicly traded healthcare companies should not have been so heavily discounted.
Source: WANTED Analytics
The correlation coefficient between the two has been 0.63 over the past 4 years, indicating a structural relationship between the level of XLV Hiring Demand (number of new online job ads posted by the companies comprising the XLV index) and XLV ETF returns. In fact, a regression equation indicates that for every 1% increase in XLV Hiring Demand, the XLV ETF grows by 1% as well.
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