WASHINGTON (MarketWatch) — Hiring in the U.S. roared back in June with a gain of 287,000 new jobs, largely putting to rest lingering worries that the labor market and broader economy had taken a turn for the worse.

The sharp rebound in hiring last month fits with other evidence, including extremely low layoffs and record job openings, that suggest the labor market remains the healthiest it’s been in years. The June jobs report also offers confirmation the U.S. economy is expanding at a moderate pace and keeping a seven-year-old recovery intact.

Economists polled by MarketWatch had forecast a 170,000 increase in new nonfarm jobs, an estimate that included about 35,000 Verizon employees returning to work after a prolonged strike.

Even if the Verizon workers are omitted, the job gains in June were the strongest of the year. Most industries added jobs. Restaurants, retailers, health-care providers, financial firms and professional services led the way.

June jobs report: What to know

The rosier employment report for June, however, cannot mask the fact that the economy is not pumping out new jobs as fast as it did a year or two ago. The U.S. added an average of 147,000 jobs in the past three months, down from a five-year high of 282,000 in the 2015 fourth quarter.

“Despite the positive report, it’s also apparent that the overall pace of job creation has slowed in the past several quarters,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors. A tighter labor market in which skilled workers are harder to find and a somewhat slower U.S. economy are the chief reasons, economists say.

Still, the June employment report could lift the odds of the Federal Reserve raising interest rates before year end. Central bankers may want to see more evidence before they act, though, given the cautious nature of the Fed under Chairwoman Janet Yellen.

Read:Trying to gauge Yellen’s stance in Fed’s ‘food fight’

In response to the report, the Dow Jones Industrial Average DJIA, -0.87% gained over 200 points. Both the Dow industrials and the S&P 500 SPX, -1.11% have now returned to levels in place before the volatility of Brexit, the U.K. vote to leave the European Union.

Read:Dow retakes 18,000 after jobs report

The U.S. unemployment rate, meanwhile, rose to 4.9% in June from 4.7% as more people entered the labor force in search of work, the Labor Department said Friday. As a result, the labor force participation rate rose a tick in June to 62.7%.

The size of the labor force had shrunk in May in part because of lost confidence in job hunting.

See economists’ reactions to the jobs report

Employment gains for May and April, meanwhile, showed little change overall. The government said a meager 11,000 new jobs were created in May instead of 38,000. The weak reading — the worst since 2010 — had stoked fresh worries that the recovery might be flagging. April’s gain was raised to 144,000 from 123,000, however.

The tightening labor market appears to be putting pressure on companies to pay more in salaries, a good thing for workers.

Average hourly wages rose 0.1% to $25.61 in June. Hourly pay increased 2.6% in the 12 months to June 2016, matching the highest level of the recovery.

Upward pressure on wages is likely to persist even if hiring is bound to slow as most economists expect. The U.S. has created 13 million jobs since 2011 to reduce the unemployment rate to precession levels last seen in 2007.

“It’s inevitable to see a slower pace of job growth at this stage of an economic cycle,” said Richard Moody, chief economist at Regions Financial. “You’d figure it would settle down.”