The US economy added 209,000 jobs in June, missing Wall Street's expectations for the first time in 15 months.

But with more than 200,000 jobs added, a decline in the unemployment rate, and rising wage growth, economists believe Friday's report still indicates another interest rate hike from the Federal Reserve in July and an increased likelihood of a second hike later in 2023.

"A stronger-than-expected reading on average hourly earnings, as well as upward revisions to wage growth in earlier months, suggests the Federal Reserve is not out of the woods yet in its fight to tame elevated inflation," Wells Fargo senior economists Sarah House and Michael Pugliese wrote in a note on Friday.

Friday's report from the Bureau of Labor Statistics showed the unemployment rate was at 3.6% in June, down from 3.7% a month prior. Average hourly earnings increased 0.4% from the month prior and grew 4.4% from the year prior, above consensus estimates for 4.2% growth.

Oxford Economics lead US economist Nancy Vanden Houten called the earnings growth "still too hot for Fed officials." Vanden Houten and other economists have suggested the average hourly earnings growth needs to grow at a pace closer to 3.5% for the Fed to reach its 2% inflation goal.

Consequently, Friday's jobs report provided little change to the closely watched CME FedWatch Tool, which tracks futures bets on where the Fed's benchmark interest rate will land. Following a strong morning of economic releases Thursday, futures tied to the Federal Reserve’s benchmark interest rate projected a 95% chance that the Fed raises rates at the July meeting, per the CME FedWatch Tool. That was unchanged Friday after the jobs report.

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In June, the Fed released updated economic forecasts that suggested two more rate hikes are likely this year. CME projections now show a 33% chance of two rate hikes by the conclusion of the November meeting. A month ago, markets were betting on just an 8% chance of that scenario.

"The still-tight labor market keeps a 25bp hike this month all but a done deal, in our view," Citi's team of economists wrote in a note on Friday. "We continue to expect a further 25bp hike in September with risks that the Fed seeks to deliver more hawkish guidance toward higher-for-longer rates in coming months."

The call for more rate hikes comes as economic data has remained resilient. Thursday's slate of releases saw job openings decrease in May but still remain higher than March's total. That same Job Openings and Labor Turnover Survey (JOLTS) also showed the quits rate — the number of resignations as a share of total employment — hit its highest levels since February.