U.S. employers added the fewest jobs in more than a year in March amid signs the country’s economy is starting to undergo strain from a strong dollar and lower oil prices.
Non-farm payrolls increased 126,000 last month, marking the smallest gain since Dec. 2013.
According to the Labor Department, the goods producing sector, which had been hurt by a strong dollar, shed 13,000 jobs last month, the largest drop since Jul. 2013.
March's slow increase in payrolls ended 12 straight months of job gains above 200,000, which was the longest streak since 1994.
In addition, data for January and February was revised to show 69,000 fewer jobs created than previously reported, giving the report an even weaker tone.
The labor market had largely shrugged off a harsh winter, a buoyant dollar, weaker global demand and a now-resolved labor dispute at West Coast ports, which have combined to undermine economic activity in the first quarter.
However, as people left the labor force, the unemployment rate held at a more than 6-1/2-year low of 5.5 percent.
Good news in the report was the increase of average hourly earning, which increased seven cents, leaving the year-on-year gain at 2.1 percent. Wages are being closely watched for clues on the timing of a Fed rate hike.
Growth slowed sharply over the past three months. Gross domestic product estimates are as low as a 0.6 percent annual increase for the first quarter, but the slowdown is expected to be temporary.
The U.S. central bank has been watching the data closely and sounds keen to raise overnight interest rates, which it has kept near zero since December 2008.
But the economy's recent softness has led investors to push back bets on the rate lift-off. Some believe the Fed could even wait until 2016 for the rate hike.