US employers added the fewest number of jobs in more than a year in March, which could heighten concerns over the recent slowdown in economic growth
The figures could also delay an anticipated interest rate increase by the Federal Reserve.
Non-farm payrolls rose 126,000 last month, the smallest gain since December 2013, the US Labor Department said.
The goods producing sector, which had been hurt by a strong dollar and lower crude oil prices, shed 13,000 jobs in March – the largest drop since July 2013.
The unemployment rate held at a more than six-and-a-half year low of 5.5% because people dropped out of the labour force.
"There's no question that the economy is showing the negative effects of the stronger dollar and the collapse in oil prices.
"Corporate profits have come under pressure, and hiring has been adjusted in response," said Jim Baird, chief investment officer at Plante Moran Financial Advisors in Kalamazoo, Michigan.
Economists polled by Reuters had forecast payrolls increasing 245,000 last month and the unemployment rate remaining at 5.5%.
Prices for US government debt rose as investors further pushed back their expectations for a Fed rate hike this year.
The US dollar fell against a basket of currencies and US stock index futures slipped.
The US central bank has appeared keen to raise its key overnight lending rate, 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.
March's tepid increase in payrolls ended 12 straight months of job gains above 200,000, which had been 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.
