Nonfarm payrolls grew by 207,000 in July the U.S. Labor Department said today. That’s the biggest increase in three months.

The department also said employers created 42,000 more nonfarm jobs in May and June than previously estimated. That raised the monthly average for the year to a robust 191,000.

The strong job growth came with increased inflationary pressures. Average hourly earnings rose six cents, or 0.4%, to US$16.13. That was the biggest increase in a year.

Meanwhile, the U.S. unemployment rate held steady at 5% as more workers entered the labor force in search of jobs. The civilian labor force increased by 450,000 in July. Of those, 438,000 found jobs. The labor-force participation rate was 66.1%, “essentially unchanged” from the previous month, the Labor Department said.

The job growth and wage increases were stronger than Wall Street expected. Economists surveyed had predicted a 180,000 increase in payrolls, a 5% unemployment rate, and a 0.3% wage increase.

Today’s report does nothing to deter the U.S. Federal Reserve from raising interest rates when it meets on Tuesday.

Economists expect the U.S. central bank to raise the federal funds rate to 3.5%.