Employers added 272,000 jobs last month, the Labor Department reported Friday, well above what economists had expected as hiring had gradually slowed. That was up from an average of 232,000 jobs in the previous 12 months, muddying the picture of an economy easing into a more sustainable pace.

What most concerns the Federal Reserve, which meets next week and again in July, is the 4.1% increase in wages over last year, a sign that inflation may not yet have been defeated.

“For those who thought they were going to see a rate cut in July, that door has largely been closed,” said Beth Ann Bovino, chief U.S. economist at U.S. Bank. While wage increases are good for workers, she noted, persistent price increases are sapping their spending power.

Stocks fell shortly after the report, before recovering to trade slightly higher. Treasury yields, which track expectations for Fed rate moves, rose sharply and remained elevated throughout the trading day.

But even the picture of an accelerating job market is not entirely clear. Elsewhere in the report, the unemployment rate rose to 4%, the highest point since January 2022. This number is taken from a household survey, which showed essentially no job growth over the past year and an increase of part-time employment, which has seen growth in part-time employment displace full-time positions.

Employer data that generate job growth numbers tends to be more reliable, but the household survey has recently been more consistent with other indicators. Retail sales have flattened. Gross domestic product fell significantly in the first quarter. The number of job openings is at its lowest level since 2021.

That’s why most economists expect job growth to continue to slow and the unemployment rate to rise further this year.

“Aside from healthcare, we don’t see much strength in the data,” said Parul Jain, chief investment strategist at MacroFin Analytics. “Growth in 2024 is unlikely to be very strong, consumers are retiring a lot and we expect disposable income to be impacted as well.”

Health care was the backbone of hiring for two and a half years, accounting for 18.6% of jobs added. An aging population has spurred demand, and increased insurance coverage through the Affordable Care Act has given more people access to care.

On the other hand, leisure and hospitality, which have been hit harder than any other sector by Covid-19 lockdowns, took until April to regain employment levels from February 2020. Expectations of a record summer travel season could push this number higher in the coming months, although few expect job growth to surpass last year’s numbers.

For example, United Airlines announced this week that it expects to add 10,000 jobs this year, up from 16,000 in 2023 and 15,000 the year before, as the post-pandemic recovery turns to organic growth.

One reason job growth beat forecasts was public employment, which recovered quickly but was expected to collapse as federal pandemic relief funds ran out. Instead, the sector added 43,000 jobs in May. But a slowdown could still be in the offing.

This is already evident to Peter Finch, the superintendent of the West Valley School District, which is located outside Yakima, Washington. Funding in the American Rescue Plan Act had allowed him to add staff members such as mental health counselors and tutors, but he now no longer fills positions as people leave.

“It’s a tough time for education,” Dr. Finch said. “If you have fewer resources, you can’t provide the same services you used to — that’s the reality.”

The impressive labor market run has been fueled by both a resurgence in legal immigration and an influx of millions of migrants with temporary status, many of whom have found jobs with the help of fast-track work permits. According to calculations from the WE Upjohn Institute for Employment Research, hiring fell sharply for native-born workers but remained stable for foreign-born workers.

That impact may also fade as President Biden’s executive order restricting asylum seekers’ access to the southern border goes into effect.

A positive sign concerns the workforce: the percentage of people aged between 25 and 54 who work or are looking for work has reached the highest level since the beginning of 2002, equal to 83.6%. In this age group, women excel, who in May reached the highest participation rate ever recorded.

The picture isn’t as rosy for adults in their early 20s, whose participation rate fell in May. As employers hang on to their workers and fewer are leaving voluntarily, there’s less room for those with little work experience, who find work at lower rates.

Even workers over 55 have not returned to the world of work in large numbers: their participation rate remains two percentage points lower than pre-pandemic. But some were turned away because costs increased and pension funds were no longer able to cover them.

Take John Refoy, 67, who retired from the Navy after 33 years as a maintenance technician