The Canadian economy added 6,600 jobs in July, largely in self-employment, according to TD Bank.
Despite a struggling economy, employment has been resilient, according to the bank. Overall, Canada has added more than 100,000 jobs this year, and job losses have been modest, even in energy-dependent areas such as Alberta.
A surge in self-employed jobs will provide a larger pool of those clients for brokers, who will likely have to rely on the alternative segment given relatively new businesses.
And that’s good news in the medium-term, especially with the bank arguing the economy is on the path to recovery.
“On balance, economic events this week have been consistent with a Canadian economy that is returning to modest growth following a shallow contraction in the first half of the year,” DePratto writes. “Exports will be a key part of this growth story, but not the whole story.”
Many industries are expected to rebound in the second half of this year, especially manufacturing. The finance, insurance and real estate sectors are also expected to benefit from the “continued resilience of the Canadian housing market,” according to DePratto.
The Bank of Canada has made two cuts to its overnight benchmark rate this year, with the hopes of stimulating the economy. The rate now sits at ½ per cent and the central bank said it plans on holding it at that mark until inflation hits the target of two per cent.
The Bank of Canada said at its last rate announcement that inflation is targeted to hit that mark in the first half of 2017, lending credence to TD’s prediction.