Job growth has slowed sharply in the US, with just 98,000 jobs added in March, according to the latest non-farm payroll data released today, against predictions of 180,000.
Spreadco's David Morrison described the numbers as "really disappointing".
"It’s fair to say that quite a few traders were looking for job gains of around 200,000 today," he said.
The unemployment rate fell to 4.5 per cent and has held at five per cent or below for 18 months now - representing full employment for the longest period since the financial crisis
"Of course, average earnings are key as these are vital in flagging up inflationary pressures and these were steady at plus 0.2 per cent month-on-month," Morrison added.
"There is also the worry that fiscal stimulus may take longer to come through than is currently priced in to markets. If the Trump administration finds it is unable to push through tax cuts, regulatory reform and infrastructure spending this year, then we could see a significant pull-back in equity prices."
Blame it on the weatherman
Kully Samra, UK managing director at Charles Schwab, said March jobs creation had been impacted negatively by poor weather.
"However, one slightly disappointing month does not constitute a wholesale change in fortunes," he added.
"We’ll need to see more hard data before we know whether these numbers are the start of a downward trend away from the strong jobs market or merely a temporary blip on the radar.
"Investors are facing the realisation that "soft" data—such as confidence readings and business surveys—doesn't necessarily translate immediately into "hard" data—like retail sales, capital expenditures, and industrial production. It's this hard data that translates into economic growth and increasing profitability. Looking at some of the parabolic moves in recent confidence surveys, it would be difficult for hard data to keep up."
Surprise and concern
Dennis de Jong, managing director at UFX.com, said: "With interest rates hiked last month, and President Trump’s pledges to put jobs at the heart of his presidency, March’s drop in non-farm payroll will bring both surprise and concern, especially with price growth on the rise.
"Uninterrupted jobs growth since last August, combined with rising inflation and accelerating wages, contributed to the rate increase at the most recent Fed meeting. The Fed has forecast two more rises in 2017, and while this will please savers, Trump will likely have to deal with the political fallout as consumers begin to feel the pinch."
Last month, the figures revealed the US had added 235,000 jobs in February, smashing targets of 200,000. This was a further increase on the surprisingly high 227,000 openings posted for January.
The US Federal Reserve hiked the federal funds rate to 0.75 per cent-one per cent last month. Fed chair Janet Yellen said at the time: "If economic progress continues, gradual increases in the federal funds rate would likely be appropriate to achieve and maintain and achieve our objectives."