According to a Labor Department report, the US economy only gained 126,000 jobs in March, marking the smallest number of jobs added since December 2014.
The slowdown in hiring ends 12 straight months of gains above 200,000. Manufacturing jobs declined for the first time in 20 months and mining employment contracted again.
The unemployment rate held steady, as expected, at 5.5 per cent.
The yearlong streak of strong hiring ended in March.
The sharp decline in oil prices and severe weather conditions across the Northeast and Midwest are to blame for the lackluster results, which analysts say curbed consumer spending and hurt manufacturers as energy firms cut orders for equipment.
Slim chance of an interest rate hike in the summer
The results of the report suggest that it is unlikely for there to be an interest rate increase at the Fed’s June meeting.
With job creation losing steam many on Wall Street expect the Fed’s dovish policy makers to insist that rates should stay put until the end of the summer or when the economy is strong enough to stand on its own.
Last week in San Francisco Janet Yellen said that recovery was fragile, adding that the central bank would move slowly to hike rates, suggesting she wants to see more improvement in the labor market before making a move.
On a positive note, hourly wages gained seven cents
There was one bright spot in the report. Average hourly wages increased by a modest seven cents to $24.86 after a 3-cent rise in February. Over the last three months average hourly earnings rose at an annual rate of 2.8% compared with the fourth quarter.
Could it just be a temporary blip?
Paul Ashworth, an economist at Capital Economics, believes that this is merely a temporary blip, as other labor market indicators, such as new openings and jobless claims, are looking strong.
However, many economists are not as optimistic.
Dollar weakened and futures dropped after jobs report
Dow Jones and Standard & Poor’s 500 futures dropped after the labor report was released and the dollar weakened.
Yield on the 10-year Treasury note declined from 1.91% on Thursday down to 1.84% on Friday.