Hiring rebounded in June as employers added 224,000 jobs, the Labor Department said Friday, beating economists' forecasts of a gain of about 160,000.

The unemployment rate increased to 3.7% from 3.6%.

The improved numbers contrast sharply with last month's report, which showed only 75,000 jobs were added to the economy in May, well below expectations of 165,000.

On Friday the May number was revised lower to 72,000, while April's total was revised down to 216,000 job gains, versus 224,000.

Notable job increases occurred in professional and business services, in health care, and in transportation and warehousing, the government said. Professional and business services added 51,000 jobs in June, following little employment change in May.

The number of long-term unemployed -- those jobless for 27 weeks or more -- was little changed at 1.4 million in June and accounted for 23.7% of the unemployed.

The surprise rebound comes at a crucial time, as slowing growth rates and modest wage gains could spark renewed bets on deeper Federal Reserve rate cuts.

The CME Group's FedWatch tool, which tracks market expectations of Fed rate moves, suggests a 25% chance of a 50-basis-point reduction later this month, against a near 100% probability that the Fed will lower its key target rate by 25 basis points.