US employers hired at a robust clip in May while wage gains held firm, suggesting the economy continues to power forward as the Federal Reserve raises interest rates at a steep pace to tame red-hot inflation.

Nonfarm payrolls increased 390,000 last month after a revised 436,000 gain in April, a Labor Department report showed Friday. The unemployment rate held at 3.6%, and the labor force participation rate crept higher.

The median estimate in a Bloomberg survey of economists called for a 318,000 advance in payrolls and for the unemployment rate to fall to 3.5%.

The report suggests that employers had success filling open positions in the month. It also potentially provides some broader reassurance that the economy can achieve a soft landing as wage gains moderate from their more rapid pace of most of 2021.

Average hourly earnings rose a less-than-forecast 0.3% from April, the same as the previous month. They were up 5.2% from a year earlier, a slowdown from 5.5% in April.

“The jobs report will provide mixed feelings for the Fed, which will welcome the steadier jobless rate, firmer participation rate, and possible softening in wages, while worrying that the economy is still running too hot to convincingly drive inflation back to the target,” Sal Guatieri, senior economist at BMO Capital Markets, said in a note.

Treasuries extended losses and stocks fell as a traders considered the report as a sign that Fed will keep its policy tightening on track.

The Fed has adopted a more aggressive monetary policy stance in an effort to curb decades-high inflation, and has indicated that it will raise rates by a half point in both June and July. While those efforts are likely to ease price pressures, they also risk eventually leading to softer demand for labor.

The figures may provide some comfort to President Joe Biden and Democrats as they face a difficult challenge defending their thin congressional majorities in the November midterm elections. Even so, rapid price gains have far outweighed plentiful jobs in polls of Americans that have shown unhappiness with the economy and disapproval of Biden’s performance.

Biden is scheduled to speak later Friday morning about the jobs report.

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