Another blowout jobs number will likely stiffen resolve at the Federal Reserve for a three-quarter-point interest rate increase at the central bank's July meeting, as the welcome news of a still-strong job market clashes with concern that it will eventually have to cool to ease inflation.

The U.S. economy added 372,000 jobs in June, a far larger-than-expected number that pushed private employment back above its pre-pandemic level and kept the unemployment rate at an ultra-low 3.6 percent.

While the jobs data is likely to cool speculation of an impending recession, it could fuel uncertainty about whether the Fed will need to become more aggressive in using higher interest rates to slow the economy and bring consumer inflation down from the current 40-year high of more than eight percent.

"I am fully supportive of moving 75 basis points" at the July meeting, Atlanta Fed president Raphael Bostic said on CNBC. "This report just reaffirms that the economy is strong and that there is still a lot of momentum in the labor market, and that is a good thing."

But that very strength, paired with "sky-high" inflation, could help make the case for further, aggressive rate hikes.

Several Fed officials have now endorsed a three-quarter-point increase at the upcoming policy meeting on July 26-27, with attention shifting to how inflation, jobs and other data respond, and what might need to happen next.

While employment is for now secondary to the headline inflation numbers in shaping policy, Fed officials regard the current job market as unsustainably tight, and data this week showed only preliminary evidence that was changing.

The pace of wage increases has declined for three months in a row. But hourly earnings are still rising at more than five percent annually. Job vacancy data for May showed there are still nearly two openings for each unemployed person, and the overall number of people either working or looking for work has shown little change since February—dashing Fed hopes of a steady rise in labor supply.

(Cover via CFP)