By Lucia Mutikani

WASHINGTON (Reuters) - U.S. employers hired far more workers than expected in June and continued to raise wages at a steady clip, signs of persistent labor market strength that give the Federal Reserve ammunition to deliver another 75-basis-point interest rate hike this month.

The Labor Department's closely watched employment report on Friday also showed no indication that companies were reducing hours for workers. The number of people working part time for economic reasons fell to its lowest level in nearly 21 years.

Strong job growth allayed fears of an imminent recession and offered hope that any downturn would be mild.

"If you're looking at this report for signs we're already in a recession, you're likely to come up blank," said Nick Bunker, an economist at Indeed in Washington. "For now, employers continue to hire a considerable number of workers at higher wages. That's something to celebrate."

The survey of establishments showed nonfarm payrolls increased by 372,000 jobs last month. It was the fourth straight month of job gains in excess of 350,000 and left employment 524,000 jobs below its pre-pandemic level. The private sector has recouped all the jobs lost during the COVID-19 pandemic and employment is 140,000 higher than in February 2020. Government employment remains in the hole by 664,000.

Economists polled by Reuters had forecast 268,000 jobs added, with estimates ranging from as low as 90,000 to as high 400,000. June's broad increase was led by the professional and business services industry, which added 74,000 jobs. Leisure and hospitality payrolls rose by 67,000 jobs. But employment in the industry remains down by 1.3 million since February 2020.

There were also strong payrolls gains in the healthcare, information as well as transportation and warehousing industries. Manufacturing added 29,000 jobs and has recouped all the jobs lost during the pandemic. Construction payrolls increased by 13,000 jobs.

The economy created 2.74 million jobs in the first half. President Joe Biden welcomed the strong employment gains.

"No country is better positioned than America to bring down inflation, without giving up all of the economic gains we have made over the last 18 months," Biden said in a statement.

Stocks on Wall Street fell. The dollar slipped against a basket of currencies. U.S. Treasury yields rose.

A DIFFERENT RECESSION The labor market is strong despite gross domestic product contracting in the January-March quarter. A raft of tepid reports ranging from May consumer spending to housing and manufacturing have left most economists expecting that GDP declined again in the second quarter.