Nonfarm payrolls grew by just 98,000 in March though the unemployment rate fell to a 10-year low of 4.5 percent, according to a closely watched report Friday from the Bureau of Labor Statistics.
Payrolls had been expected to increase by 180,000 in March, according to economists surveyed by Reuters.
"What a number. This makes your jaw drop," said Naeem Aslam, chief market analyst at Think Markets.
A more encompassing measure of unemployment that includes discouraged workers those at work part-time for economic reasons fell three-tenths to 8.9 percent, the lowest level since December 2007.
While the payroll growth number wasn't what Wall Street had expected, market reaction was muted. Stock futures initially dipped but then pared losses, while government bond yields were off their lows as well as the market digested the numbers.
Weather issues may have had a hand in March's numbers as a big snowstorm in mid-month may have depressed activity. Retail jobs fell by 30,000 and construction was up just 6,000 after a gain of 59,000 in February.
"It was not a particularly good number, that's for sure, but I think one of the things we have to do in fairness is take out the retail number," said JJ Kinahan, chief strategist at TD Ameritrade. "Let's face it, retail stores are trying to figure out what is the proper balance between brick-and-mortar and online sales. If you do take that number out, it's not quite as bad a jobs report."
The jobs numbers are "skewed by the weather-related effects of the big storm that hit the Northeast," said Tony Bedikian, head of global markets for Citizens Bank. "My view is that it's going to be likely dismissed by the markets. There are some positives within the report."
Weather-related absences amounted to 164,000, which actually was lower than the 187,000 for the same month in 2016.
The headline unemployment rate decline came as the ranks of the unemployed fell by 326,000, according to the BLS household survey. The civilian labor force expanded by 145,000, though those not in the labor force rose slightly to 94.2 million. The ranks of the employed surged by 472,000.
Wage growth kept pace, with average hourly earnings up by 2.7 percent on an annualized basis.
The stunning drop came amid what had been a strong year for jobs, with both January and February easily topping Wall Street's expectations, though both months were revised lower in Friday's release. January's growth was reduced from 238,000 to 216,000, while February fell from 235,000 to 219,000, equating to a total decline of 38,000. Government jobs rose by 9,000.
A report earlier in the week from ADP showed that private payrolls expanded by 263,000, further spiking hopes that the momentum would continue.
However, the report in total was a blow to expectations that President Donald Trump's pro-growth agenda would fuel an economic boom this year.
Hopes from business leaders, investors and consumers have been running high for economic growth this year, though the hard data have been mixed. While hiring has been moving at a solid clip, sales growth has been modest across the spectrum.
Federal Reserve officials also are keeping a close eye on the monthly payrolls report, especially watching for signs of wage pressures. The central bank raised its benchmark interest rate target a quarter point in both December and March, and is widely believed to be primed for another increase in June.
The biggest job gains came in professional and business services at 56,000, while mining added 11,000. Wall Street also got a boost, with financial activities gaining 9,000 as part of a 178,000-position expansion over the past 12 months.