US job growth slowed sharply in May and wages rose less than expected, suggesting the loss of momentum in economic activity was spreading to the labour market.
This could increase calls for the Federal Reserve to cut interest rates this year.
The cool-off in hiring reported by the Labor Department on Friday was even before a recent escalation in trade tensions between the United States and two of its major trading partners, China and Mexico.
Economists have warned that the trade fights could undermine the economy, which will celebrate 10 years of expansion next month, the longest on record.
The US economy thus far has been largely resilient to the trade war with China.
President Donald Trump in early May slapped additional tariffs of up to 25% on $200 billion of Chinese goods, which prompted retaliation by Beijing.
Last week, Trump also said he would impose a tariff on all goods from Mexico in a bid to stem the tide of migrants across the US-Mexican border.
Talks are ongoing to prevent the duties from kicking in at 5% on June 10.
Non-farm payrolls increased by 75,000 jobs last month, the government said in its closely watched employment report, falling below the roughly 100,000 needed per month to keep up with growth in the working-age population.
The economy created 75,000 fewer jobs in March and April than previously reported. Economists polled by Reuters had forecast payrolls rising by 185,000 jobs last month.
May's disappointing job growth was flagged by a report earlier this week from payrolls processing firm ADP showing the smallest gain in private payrolls in nine years last month.
Another report this week showed a drop in online ads by businesses looking for help.
Last month's slowdown in job gains, however, probably understates the health of the labor market as measures such as weekly applications for unemployment benefits and the Institute for Supply Management's services employment gauge have suggested underlying strength.
Monthly wage growth remained moderate in May, with average hourly earnings increasing six cents, or 0.2% following a similar gain in April.
That lowered the annual increase in wages to 3.1% from 3.2% in April. The average workweek was unchanged at 34.4 hours last month.
The moderation in wage gains, if sustained could cast doubts on the Fed's optimism that inflation would return to its 2% target. Financial markets are pricing in two rate cuts this year.
The tepid employment report added to soft data on consumer spending, business investment, manufacturing and homes sales in suggesting the economy was losing momentum in the second quarter following a temporary boost from exports, inventory accumulation and defence spending.
Growth is cooling as the massive stimulus from last year's tax cuts and spending increases fades.
The Atlanta Fed is forecasting gross domestic product rising at a 1.5% annualised rate in the second quarter. The economy grew at a 3.1% pace in the first quarter.
The US unemployment rate remained near a 50-year low of 3.6% in May. The jobless rate was partly pushed down by workers dropping out of the labour force over the last four months.
Today's figures showed that employment gains in May slowed across all sectors.
US manufacturing payrolls increased by 3,000 last month. Manufacturing employment will be watched closely for signs of the impact of the tariffs on the economy.
Factory output has been weak and sentiment dropped to a 31-month low in May, with manufacturers worried mostly about the trade tensions.
Employers in the construction sector hired 4,000 workers in May, while US government payrolls fell by 15,000 jobs.