WASHINGTON, DC—Friday's unemployment numbers released by the US Labor Department were, simply put, dismal—especially as they followed a series of other economic indicators that suggest the economy is softening.

US payrolls added 126,000 jobs in March, the lowest level since December 2013 and a clear end to the 200,000 plus per month streak that the economy had been on for the past year. More significantly, the figures add credence to the growing suspicion that the US economy has slowed significantly in the last three months – and the drop off may not just be due to the tough winter season. Taken together, such indicators as consumer spending, housing starts and manufacturing indexes point to a sub-1 percent annual growth rate for the first quarter.

Drilling a little deeper uncovers additional sobering trends.

Income growth remains stagnant.

The missing ingredient of the recovery, many say, has been lackluster income and wage growth. For a while it appeared that wage growth was about to accelerate, but that balloon is sinking back to earth. "While average hourly earnings picked up 0.3 percent, the year-over year rise of 2.1 percent showed no signs of a break-out from its trend over the past two years," says Doug Duncan, Chief Economist at Fannie Mae.

The Fed will not base its decision to hold off on interest rate increases from one report.

The dour report, while undoubtedly scrutinized by the Federal Reserve Bank, will not keep the bank from raising interest rates as it has widely signaled it will do this fall. Duncan remains confident that Fannie Mae's earlier prediction that the "Fed funds rate lift-off" will occur in September is still on track.

So does Lindsey M. Piegza, chief economist at Sterne Agee.

This is not a game changer for the Central Bank, she says. "The Fed does not base monetary policy on one report."

But it is still worrisome and here is why.

Headline job creation remains positive but the quarterly average has slowed from 324,000 in Q4 to 197,000 across the first three months of the year, Piegza says. Furthermore, the augmented unemployment rate remains near 11%, more than 1.75% above the pre-recession average. "And while the civilian unemployment rate has come down within the range of full employment, the decline represents a multi-decade low in the labor force participation rate as much as it does unemployed Americans finding gainful employment."

In short, while top line employment remain modest, the gains remain insufficient to absorb the lingering slack in the labor maker thus leaving wage pressures at a stagnant 2% annual pace since 2010, she says.

Construction took a hit.

Construction jobs declined by 1,000 in March, although it is still up by 282,000 compared to the prior year, according to an analysis by the Associated General Contractors of America.

"After 14 months of steady job gains, construction employment suffered in March," said Ken Simonson, the association's chief economist. "Except for multifamily construction, home building remains weak and government officials just can't seem to find a way to pay for needed repairs to a host of aging facilities."

The employment figures are consistent with February spending data released earlier this month which showed declining investments in residential and public sector construction projects offsetting growing demand for private, nonresidential construction.