The U.S. labor market may not be as weak as February’s payrolls number suggested, but the report provides a reality check that a long-forecast slowdown is arriving.

Employers added 20,000 jobs during the month, the fewest since September 2017, missing all economist estimates and bucking a recent trend of strong February readings. Analysts said the unexpectedly low figure doesn’t mean conditions rapidly deteriorated — citing weather effects and payback from outsize gains in prior months — but they pointed to the likelihood of a moderation in job gains this year as economic growth cools.

“I don’t think you want to say that 20,000 is the new trend, but the trend probably is shifting down,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York. “It’s hard to know with precision how much of a downshift there will be. We’ll see job growth better than this, but not as good as we saw last year.”

U.S. stocks dropped along with the dollar, with the Standard & Poor’s 500 Index falling for a fifth day, while benchmark Treasury yields were steady as markets weighed the jobs report with the risk of greater inflation pressures.

While the payroll gains disappointed, the report’s other highlights were largely positive: the unemployment rate declined by more than forecast and hourly wages rose from a year earlier at the fastest pace since 2009, figures that bode well for consumer spending. Some industries hit hard in February are typically closely tied to weather patterns, including construction and retail, while the lingering effects of the partial government shutdown may have created some volatility.

“There was always going to be noise in this as a result of the shutdown,” Constance Hunter, chief economist at KPMG LLP, said on Bloomberg Television.

Policy makers and economists are likely to wait for several months of weak hiring before concluding there’s cause for concern in the labor market. The figures also validate the Federal Reserve’s January decision to pause interest-rate hikes while awaiting signs of a more-persistent acceleration in inflation.

What Bloomberg’s Economists Say

“The Fed just picked a really good time to go into hibernation, so they really don’t have to deal with any of this,” said Stephen Stanley, chief economist at Amherst Pierpont Securities LLC.

A separate government report Friday showed new-home construction rebounded in January by more than expected as building permits hit a nine-month high, indicating the housing market is stabilizing amid lower mortgage rates.

Economists were already expecting monthly payroll gains to average about 170,000 this year, following a 223,000 pace in 2018 that was driven by corporate investment and consumer demand fueled by tax cuts. The effects of fiscal stimulus, including a boost in government spending, are expected to fade while President Donald Trump’s trade war with China remains an overhang on businesses.

The report also showed signs that companies are paying up for employees in a tight market. Average hourly earnings for private workers rose 0.4 percent from the prior month, topping estimates, following a 0.1% gain. That indicates the economy may get a lift from wage increases at companies including Amazon Inc. along with Costco Wholesale Corp., which said Thursday it’s boosting starting wages.

Another positive highlight: The U-6, or underemployment rate, plunged to 7.3%, the lowest since 2001, from 8.1%. This includes part-time workers who want a full-time job and those less active in seeking work.

“There’s no reason to panic,” Ryan Sweet, head of monetary policy research at Moody’s Analytics Inc. “You average the couple months together and the jobs market is still doing well. Job growth will slow this year, as the economy begins to moderate. But 20,000 jobs is not what we’re going to be creating month-in and month-out.”

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