Job growth surged to 222,000 in June, and jobless claims were also down this week. Strong employment keeps the Fed on track to raise rates again this year.

The producer price index, a key gauge of inflation, was up 0.1% last month. Fed officials are closely watching inflation, which pressures mortgage rates higher.

In testimony to Congress this week, Fed Chair Janet Yellen shared that the Fed will gradually raise policy rates and reduce balance sheet holdings this year.