The major domestic equity indexes closed higher on Friday, with the S&P 500 index posting its best gain in six sessions on the heels of a payrolls report that gave investors more confidence in the strength of the U.S. economy.

The economy added 222,000 jobs last month, Labor Department data showed, exceeding expectations of a 179,000 gain, putting the Federal Reserve on track to raise interest rates once more this year. However, muted wage growth may give the Fed room to pause if need be.

However, now the perceived chances of a rate hike at the Fed’s December meeting stood at 48.9 percent, according to Thomson Reuters data. At the same time, policymakers have taken opposing views on inflation after it retreated further below the Fed’s 2 percent target in May, creating uncertainty over the future path of rate hikes.

The technology sector, up 1.25 percent, led the charge higher, buoyed by gains of more than 1 percent in market-cap heavyweights Apple, Microsoft and Facebook.

Despite slumping nearly 3 percent last week, the tech sector is up more than 17 percent on the year, tops among the 11 major S&P groups.

With the Fed now expected to remain on track for a rate hike later this year, financials, up 0.56 percent, also advanced as they benefit from a steepening of the yield curve.

Tesla rose 1.42 percent after the luxury electric carmaker said about 3,500 vehicles were in transit to customers at the end of the second quarter and they would be counted as deliveries in the third quarter.

Approximately 5.74 billion shares changed hands on the major domestic equity exchanges, a number that was well below the 7.13 billion share daily average over the last 20 sessions.

Job Growth Better Than Expected

Job growth rose more than expected in June and employers increased hours for workers, signs of labor market strength that could keep the Federal Reserve on course for a third interest rate hike this year despite sluggish wage gains.

According to a Labor Department report released Friday morning, non-farm payrolls were up by 222,000 jobs last month, exceeding economists’ expectations for a gain of 179,000. Data for April and May was revised to show 47,000 more jobs created than previously reported.

While the unemployment rate rose to 4.4 percent from a 16-year low of 4.3 percent in May, that was because more people were looking for work, a sign of confidence in the labor market.

The jobless rate has fallen four-tenths of a percentage point this year and is near the most recent Fed median forecast for 2017. The average workweek increased to 34.5 hours from 34.4 hours in May.

However, sluggish wage growth continues to be a concern. Average hourly earnings increased four cents, or 0.2 percent, in June after gaining 0.1 percent in May. That raised the year-on-year wage increase to 2.5 percent from 2.4 percent in May.

There is optimism that the tightening labor market will soon spur faster wage growth amid growing anecdotal evidence of companies struggling to find qualified workers.

Labor market buoyancy could also encourage the Fed to announce plans to start reducing its $4.2 trillion portfolio of Treasury bonds and mortgage-backed securities in September.

June’s employment gains exceeded the 186,000-monthly average for 2016, reinforcing views that the economy regained speed in the second quarter after a lackluster performance at the start of the year.

The economy needs to create 75,000 to 100,000 jobs per month to keep up with growth in the working-age population. Yet, even as the labor market tightens, some slack remains.

A broad measure of unemployment, which includes people who want to work but have given up searching and those working part-time because they cannot find full-time employment, rose to 8.6 percent last month from 8.4 percent in May, which was the lowest since November 2007.

The labor force participation rate, or the share of working-age Americans who are employed or at least looking for a job, rose one-tenth of a percentage point to 62.8 percent.

Employment gains were broad in June, with manufacturing payrolls increasing 1,000 after factories shed 2,000 jobs in May. But the automobile sector lost a further 1,300 jobs as slowing sales and bloated inventories forced manufacturers to cut production. The sector has seen a reduction in jobs for three straight months.

Ford has announced plans to cut 1,400 salaried jobs in North America and Asia through voluntary early retirement and other financial incentives. Others, like General Motors are embarking on extended summer assembly plant shutdowns, which will leave workers temporarily unemployed.

Construction added another 16,000 jobs last month. Healthcare employment surged by 59,100, while the professional and business services sector created 35,000 jobs.

Retailers hired 8,100 workers, a surprise for a sector which had shed jobs for four straight months. Department store operators like J.C. Penney, Macy’s and Abercrombie & Fitch are struggling with stiff competition from online retailers led by Amazon.

Government employment rebounded by 35,000 jobs last month, with gains at federal and local governments.

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