(NewsNation) — America’s employers added 372,000 jobs in June, outpacing expectations amid skyrocketing inflation and mounting fears of an economic backslide. The strong gain will likely spur the Federal Reserve to keep sharply raising interest rates to cool the economy and slow price increases.

The report Friday from the Labor Department showed that last month’s job growth kept the unemployment rate to 3.6%, the same rate as the prior three reports and the lowest level since the pandemic erupted two years ago.

The past year’s streak of robust hiring has been good for job seekers and has led to higher pay for many employees. But it has also helped fuel the highest inflation in four decades and heightened pressure on the Fed to further slow borrowing and spending.

The May jobs report showed the U.S. added 390,000 jobs. May’s gain reflects a still-healthy job market despite concerns that the economy will weaken in the coming months as the Federal Reserve steadily raises rates to fight inflation. 

Many employers are still struggling to fill jobs, especially in the economy’s vast service sector, with Americans now traveling, eating out and attending public events with much greater frequency. The Fed may see the June job gain as evidence that the rapid pace of hiring is feeding inflation as companies raise pay to attract workers and then increase prices to cover their higher labor costs.

The Fed has already embarked on its fastest series of rate hikes since the 1980s, and further large increases would making borrowing much costlier for consumers and businesses and increase the risk of a recession.

This story is developing. Refresh for updates.

The Associated Press contributed to this report.