Following more than a year of job growth in Canada, many economists expect employment numbers to start cooling off when Statistics Canada releases its January jobs report on Friday.

CIBC economist Nick Exarhos, writing in a recent commentary, said the January report is expected to show a gain of about 13,000 jobs, which he said will be enough to keep the national employment rate at a historically low 5.8 per cent.

"Indeed, January's more modest increase will in part be a sign of things to come in 2018, with a slower path to job gains coming as we edge ever closer to full employment," he wrote.

The latest report will come on the heels of a very good fourth quarter for employment gains, with National Bank pointing out that "no less than [173,700] jobs were added in the country in the three months to December, the second largest tally since 2002."

"What's more, the current streak of consecutive monthly gains for employment now stands at 17, the longest since 2000," the bank said.

In November and December alone, the economy added about 145,000 new jobs, Scotiabank said in commentary, but added that it might be "a stretch" to expect another big job creation figure for January.

"Since the inception of the Labour Force Survey in 1976, there have been two other times when two consecutive months have matched or exceeded the pace of job gains registered in the two months of November and December of last year," Scotiabank said. In March-April 2012, when 187,000 jobs were created, May employment dipped by 21,000, while in Jan-Feb 1976, when 200,800 jobs were added, both March and April followed up with sizeable gains.

This time around, Scotiabank is forecasting the unemployment rate for January to come in at 5.7 per cent, with the addition of about 10,000 jobs.

At BMO Capital Markets, economist Benjamin Reitzes said job growth likely decelerated in January to "more normal" 20,000, given underlying economic growth of around two per cent.

"However, since there are no leading indicators to work with, it would not be shocking to see a big swing either way," Reitzes said.

Minimum wage hike

Economists with TD, who are forecasting January employment to fall by about 12,000 jobs, pointed to Ontario's recently introduced minimum wage increase as a partial source for an expected slowdown in job creation.

"The minimum wage hike in Ontario, which was implemented on Jan. 1, should lead to job losses totalling 90,000 over the mid-term," TD economist said in a recent commentary. "As a result, we expect Ontario to underperform in January and drive the net loss of jobs."

BMO's Reitzes said the Ontario minimum wage hike, when combined with an improving labour market, is expected to push wage gains sharply higher to 3.5 per cent, marking the fastest pace in over five years.

However, TD said it expects the Bank of Canada will be more concerned with the trends in job growth in January than the direction of wages, because they view wages as a lagging indicator relative to jobs.

The Bank of Canada on Jan. 17 bumped the target for the overnight lending rate to 1.25 per cent from one per cent — the third time it has moved its benchmark rate from once-record lows last summer. The central bank noted last month that wages had picked up but were rising by less than would be typical in a tight job market.

The Bank of Canada's next interest rate decision date is March 7.

Not all market watchers are expecting the job market to show moderation in January.

"We believe the party is not over yet," National Bank economists said a commentary.

"Indeed, we are calling for a 50,000 increase in the first month of the year, a development that would bring the unemployment rate down two ticks to 5.6 per cent," they said.

National said it bases its optimistic outlook on strong hiring intentions highlighted in the latest Bank of Canada Business Outlook Survey, improving corporate earnings and widespread labour shortages reported in a recent report from the Canadian Federation of Independent Business.