The US economy created the lowest number of jobs for a year-and-a-half in February, coming in well below forecasts.
Just 20,000 new jobs were created last month against expectations of a 180,000 increase, official figures show.
It is the slowest growth in non-farm payrolls since September 2017 when employment was affected by Hurricanes Harvey and Irma.
The construction sector saw a sharp 31,000 fall in employment last month.
Michael Pearce, senior US economist at Capital Economics, said: “The sharp slowdown in payroll employment growth in February provides further evidence that economic growth has slowed in the first quarter.
“That adds weight to our view that the Fed will not be raising interest rates this year.”
The Dow Jones Industrial Average opened down 212.81 points, or 0.8%, at 25,260.42. Investors were disappointed by the jobs data and a steep fall in Chinese exports amid a trade war with the US.
Despite the extremely weak jobs growth in February, the unemployment rate fell, dropping to 3.8%, from 4% in January.
Average weekly wages increased, rising by 3.4% from a year earlier to $27.66 an hour.
New job numbers for January were also revised higher to 311,000 from 304,000.
Kully Samra, vice president at Charles Schwab, said that despite the disappointment for February “the outlook for the US economy remains strong relative to the rest of the world”.
“The question is whether businesses are becoming more cautious because of weaker economic data and the return of volatility; or is the economy weakening a result of reduced business confidence?,” he added.
Federal employees returned to work in February after the government shutdown in January
Data from the US Bureau of Labor Statistics also showed that the number of people ending part-time jobs or on temporary leave dropped by 225,000.
It said: “This decline reflects, in part, the return of federal workers who were furloughed in January due to the partial government shutdown.”
Ian Shepherdson, chief economist Pantheon Macroeconomics, said that the expectation for 180,000 new jobs in February was too high because of the huge 311,000 rise in January, which doubled-counted government workers who took second jobs during the shutdown.
He said that average new jobs growth over a three-month period was 186,000 which “is entirely respectable”.
“Indicators of labour demand have softened a bit but are nothing like weak enough to suggest that the February number is indicative of a new trend; we expect a return to the high 180,000 in March,” he added.