The U.S. economy added 236,000 jobs in March, somewhat below expectations, and well below February's upwardly revised figure of 326,000 as the unemployment rate remained steady.
The unemployment rate clocked in at 3.5% in March, nearly unchanged from the 3.6% figure reported in the prior month, the U.S. Bureau of Labor Statistics reported on Friday.
Economists had expected an increase of 240,000 jobs in March and the jobless rate to reach 3.6%, according to a survey by FactSet Research Systems, a financial data firm.
Employment numbers continued to "trend up" in the leisure and hospitality sectors, as well as in government, professional and business services, and health care, the bureau noted in the release.
The Federal Reserve will likely closely examine the March jobs report as they prepare to release their next monetary policy decision on May 3.
As of Friday morning, according to CME Group's FedWatch tool, market participants' pricing of fed fund futures indicated there is a 66.5% probability that the central bank will increase rates by 25 basis points at the next meeting, and a 33.5% probability it will keep rates unchanged.
The Fed's key short-term interest rate is now in a range of between 4.75% to 5%, after the central bank raised rates by 25 basis points on March 22.
On March 31, in a speech at the Midwest Economics Association Annual Meeting in Cleveland, Fed Governor Lisa D. Cook suggested modest rate hikes were likely forthcoming.
"The FOMC has been raising rates in smaller increments as we seek a sufficiently restrictive monetary policy stance to return inflation to 2% over time," she said. "By taking smaller steps, we can observe economic and financial conditions and consider the cumulative effects of our policy actions."
Brian Mulberry, Denver-based portfolio manager at Zacks Investment Management, said by email on Friday morning the impact of the jobs numbers on Fed policy will "likely be muted since the overall goal to bring prices down is to move unemployment higher, less people working have less money to spend and prices will fall."
Mr. Mulberry expects another 25 basis point hike in May. "There will be another month's worth of data before that meeting though, and while we expect the trends of weakness to continue in the economy, the slope of those trends will be more important to policy than some of the actual data," he added.
Chicago-based Zacks Investment has $13.9 billion in assets under management.
John Luke Tyner, Fairhope, Ala.-based portfolio manager and fixed-income analyst at Aptus Capital Advisors, said by email that this was "a mixed employment number."
"The headline payrolls number was in line, led by continued strong state and local government hiring," he said. "Average hourly earnings were a little bit soft which should take a little pressure off of the Fed."
Mr. Tyner also expects a 25 basis point hike in May.
Aptus has $4.25 billion in AUM.
