US employers added just 126,000 jobs - the fewest since December 2013 - snapping a 12-month streak of gains above 200,000.
The unemployment rate remained at 5.5 per cent, the Labor Department said in its monthly report Friday.
The March jobs data raised uncertainties about the world's largest economy, which for months has been the envy of other industrialized nations for its steadily robust hiring and growth. Employers now appear wary about the economy, especially as a strong dollar has slowed US exports, home sales have sputtered and cheaper petrol has yet to unleash more consumer spending.
Some of the weakness may prove temporary: An unseasonably cold March followed a brutal winter that slowed key sectors of the economy.
Last month's subpar job growth could make the Federal Reserve less likely to start raising interest rates from record lows in June, as some have been anticipating. The Fed could decide that the economy still needs the benefit of low borrowing costs to generate healthy growth.
Reflecting that sentiment, government bond yields fell Friday. The yield on the US 10-year Treasury note dropped to 1.84 per cent from 1.90 per cent before the jobs report was released. US stock markets are closed in observance of Good Friday.
Economists noted that for months hiring had been stronger than other gauges of the economy, suggesting that a pullback in job gains was inevitable.
"Job growth has been running at a stupendous pace in America over the last several months, increasingly out of tune with other economic indicators, which have pointed to a slowdown," James Marple, senior economist at TD Economics, wrote in a research note. "The reckoning in March closes at least some of this gap."'
At the same time, some said last month's data looks bleak in part because hiring had been so robust in the months that preceded it.
"Employers aren't laying people off," noted Patrick O'Keefe, director of economic research at the consulting firm CohnReznick. "What they've decided to do is slow down the pace at which they're hiring until they have more confidence."
Last month, the manufacturing, building and government sectors all shed workers. Factories cut 1,000, snapping a 19-month hiring streak. Construction jobs also fell by 1,000, the first drop in 15 months. Hiring at restaurants plunged from February. The mining and logging sector, which includes oil drilling, lost 11,000.
Some other categories showed further gains. Health care added 22,000 workers. Professional and business services -- a sector that includes lawyers, engineers, accountants and office temps - gained 40,000. Financial services expanded by 8,000, and retailers maintained their 12-month pace by adding 25,900.
In addition to reporting sluggish hiring for March, the government revised down its estimate of job gains in February and January by a combined 69,000.
Wage growth in March remained weak. Average hourly wages rose 7 cents to $24.86 an hour. That marked a year-over-year pay increase of just 2.1 per cent. But because average hours worked fell in March for the first time in 15 months, Americans actually earned less on average than they did in February. Tepid pay increases have been a drag on the economy since the Great Recession ended nearly six years ago.
Many Americans remain out of the labor force, partly because many baby boomers are reaching retirement age. The percentage of Americans who are either working or looking for work fell in March to 62.7 per cent, tying the lowest such rate since 1978.
Job growth had been healthy for more than a year before March. Yet the streak of strong hiring, along with cheaper petrol, hasn't significantly boosted consumer spending.
The Fed signaled last month that it would be cautious in raising rates from record lows. The Fed has yet to rule out a June rate hike. But many analysts expect the first increase no earlier than September.
- Liam Dann, AP
