Canadian employment growth, which has been on a torrid pace with about 100,000 jobs added over May and June, is expected to show a pronounced slowdown when figures for July are released Friday.

Following job gains of 55,000 in May and 45,000 in June, many economists are now projecting smaller gains, with some even forecasting a reduction in employment. The consensus forecast is for the addition of 19,000 jobs

"Employment growth is forecast to pause in July following two months of robust gains," TD economists said in a recent commentary. "Small business sentiment and hiring intentions have cooled since peaking in May and survey data has pointed towards more subdued hiring conditions in manufacturing."

TD is projecting no growth in employment, and for the national unemployment rate to remain at 6.5 per cent.

BMO Capital Markets is forecasting a gain of 10,000 jobs, and for the jobless rate to stay unchanged.

"Canadian employment has had the best 11 months since 2010, consistent with the broader pickup in the economy," BMO economist Benjamin Reitzes wrote in a commentary.

He also pointed out the July employment report has tended to miss expectations, doing so in eight of the past 10 years.

Meanwhile, National Bank said the massive job gains — up 186,000 since the start of the year — are "unsustainable" and suggests Canada could see a net loss of jobs for the month.

"We're expecting a 10,000 decline for employment in July, a first monthly drop in eight months," the bank said. It's also forecasting that the jobless rate will stay unchanged.

"Even if our scenario was to prevail, the job tally in the 12 months ending in July would still total 367,000."

Strong economic growth, fuelled by consumer spending, contributed to the Bank of Canada's move last month to boost a key interest rate for the first time in seven years.

Attention on wages

With job gains expected to be modest, economists will be looking for some growth in hourly wages, with CIBC saying better wage gains are "overdue."

"Employment growth will slow in the back half of the year as the economy chews through remaining slack, and available workers," CIBC Capital Markets economist Nick Exarhos said in a commentary. "But the slowing in jobs should be offset by what will be stronger wage gains, bolstering Canadian incomes."

TD said wage growth could see a pickup but any gains in wages are expected to be marginal.

Average hourly wages posted a year-over-year gain of 1.3 per cent in June, and BMO economists are projecting a smaller 1.1 per cent increase year-over-year for July.