The dollar and Treasury yields fell as the data signaled the labor market - a pillar of strength for an economy headed for a record expansion - was facing new pressures even before Trump threatened tariffs on Mexican goods in addition to proposed higher levies on Chinese imports.
Talks to prevent the duties from kicking in at 5 per cent on June 10 continue.
The economy expanded by 75,000 jobs in May, which was much less than expected.
Additionally, the job count for April was revised downward from 263,000 to 224,000, while March's numbers were lowered from 189,000 to 153,000. The job gains in May were the fewest since February.
But May's job growth could disappoint after a report on Wednesday from payrolls processing firm ADP showed the smallest gain in private payrolls in nine years last month.
The Labor Department report, which sometimes can mention special factors that affected jobs or survey responses, didn't cite any such as weather for the latest month.
Last month, average hourly earnings climbed a slight 3.1%, and the labor force participation rate remained unchanged at 62.8%.
"On balance, we still think Fed officials will want to see evidence of more sustained weakness before taking action, but we are increasingly convinced that the Fed will begin cutting interest rates later this year", Andrew Hunter, senior U.S. economist for Capital Economics, wrote in a note to clients on Friday. Ironically, the duties could hurt US -based auto brands while largely sparing many Japanese and German ones.
The disappointing number encouraged Wall Street, however, where the three major stock indexes jumped more than one per cent as investors bet on an increased chance of a Fed interest rate cut.
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 defense spending.
Earlier this week, a key metric of United States manufacturing activity showed that while manufacturing continues to expand in general, it did so last month at the slowest pace in over two years. The economy grew at a 3.1% pace in the first quarter.
Unemployment remains at 3.6 percent, a 50-year low, while wages have grown 3.1 percent since this time last year.
Lawrence Yun, chief economist for the National Association of Realtors, said the fact that the US had another month of job additions should help fuel demand for housing.
Employment gains in May were likely across all sectors, though the pace probably slowed from April.
Manufacturing payrolls increased by 3,000 last month.