Hiring in March and April was also revised lower, with job gains now just 123,000 in April, down from an initial estimate of 160,000. March was downgraded to 186,000 from 208,000.
Job gains have now averaged just 116,000 in the past three months, down sharply from an average of 230,000 in the 12 months ending in April.
The total was lowered by the Verizon workers’ strike, which depressed hiring in the telecom sector by 34,000.
Still, job losses were widespread: Manufacturers cut 10,000 positions, while construction firms cut 15,000. Temporary help firms shed 21,000 jobs. Retailers, hotels and restaurants added jobs, but at a slower pace than recent months.
Friday’s dismal jobs report was a surprise in part because most recent economic reports have been encouraging: Consumer spending surged in April. Americans ramped up purchases of autos and other big-ticket items, like appliances.
Home sales and construction have also increased. Sales of new homes reached an eight-year high in April.
Even manufacturing, which has suffered from weak growth overseas and a strong dollar that has depressed exports, is showing signs of stabilizing. Factory activity expanded in May for a third straight month, according to a survey of purchasing managers.
In December, after months of economic improvement, the Fed raised its benchmark short-term rate after pegging it near zero for seven years. In March, officials indicated that they expected just two additional increases this year.
Chair Janet Yellen has long made it clear that she studies a “dashboard” of job market data to help assess the economy’s health, rather than a single number such as hiring or unemployment.
Fed officials may not keep investors guessing for long: Yellen will speak Monday in a closely watched address that may show how she has interpreted Friday’s report.
And Lael Brainard, a Fed official who is a longtime skeptic of raising rates, will speak later Friday. Any sign that Brainard is willing to accept higher rates would likely be seen as evidence that Yellen — and the Fed — may act soon.