Employers in the US added just 88,000, while the unemployment rate notched lower to 7.6 percent, largely due to people dropping out of the work force, according to the Labour Department.
The Dow Jones lost 0.28 per cent, after dropping in excess of 1 per cent in early trade. The S&P 500 lost 0.48 per cent, while the NASDAQ fell 0.65 per cent.
In Europe the FTSEuro 300 posted its worst slide in 2013 as unemployment data in the US showed that the economic recovery was running out of steam. The German DAX dropped more than 2 per cent, while the French CAC fell more than 1.68 per cent.
Asian markets too retreated in trade though the Nikkei bucked the trend on fresh stimulus being unveiled in the country. Indian markets closed lower on fresh selling by foreign funds in frontline stocks including ITC, HDFC and ICICI Bank.
Markets around the globe, including India would now look at the earnings season which kicks-off next week. In fact, India's earnings season would see Infosys declaring its results on Friday.