GLOBAL MARKETS-Weak U.S. jobs growth hits shares, dollar dips

* U.S. March payroll growth 88,000, less than forecast

* Wall Street set to open weaker, European shares weaken

* Dollar index falls 0.3 percent

LONDON, April 5 (Reuters) - European shares extended their losses, Wall Street was poised to open lower and Treasury bonds rose on Friday after a U.S. jobs report revealed a hiring slowdown in March, raising fears that the economic recovery was losing momentum.

American employers took on 88,000 more people last month against expectations for a gain of around 200,000 and down from a revised 268,000 in February. The unemployment rate fell to 7.6 percent from 7.7 percent.

Fears had already been growing about the U.S. recovery before the jobs report due to weaker-than-expected data this week on manufacturing activity and private sector hiring.

"The report will fuel concerns about another spring swoon for the economy, the adverse impact of Congressional dysfunction and, more generally, the weak underlying dynamism of the economy," Mohamed El-Erian, Co-Chief Investment Officer at Pacific Investment Management Company.

After the data the FTSEurofirst 300 index of Europe's top companies was down 1.8 percent at 1,159.30 points extending losses of 1.1 percent on Thursday.

London's FTSE 100, Frankfurt's DAX and Paris's CAC-40 were up to 2.0 percent lower.

U.S. stock index futures were down around 1.0 percent, pointing to lower open on Wall Street, while the U.S. Treasury 30-year bond was up two points, pushing its yield down to 2.89 percent from 2.94 percent before the data.

The dollar was down 0.3 percent against a basket of major currencies and against the euro it fell 0.5 percent to leave the single currency trading at around $1.30. Against the yen, the greenback was steady at 96.36 yen.