WASHINGTON -- A disappointing March jobs report Friday, marked by a sharp slowdown in hiring and shrinking labor force participation, triggered new debate over the strength of the U.S. economic recovery.Mainstream economists had expected the report to show 180,000 to 200,000 new jobs created last month, but the Labor Department said employment increased by just 88,000 jobs nationwide, way off from February's 236,000 net jobs. The Dow Jones industrial average dove 145 points in the first 90 minutes of trading, but prices recovered during a day of volatile trading to close only modestly lower.In the past 12 months, hiring averaged 169,000 new jobs per month -- February's strong number was revised upward -- so a weak March suggested to some a very rapid slowdown. The disappointment eclipsed a 0.1 percentage point decline in the unemployment rate in March, to 7.6 percent.Mark Zandi, chief economist for forecaster Moody's Analytics, said the job market faces more challenges, citing government budget cuts."The weak March job gain presages weaker job gains this spring and summer," he said. "Fallout from the [budget] sequester has yet to hit, and adjustment to healthcare reform by small businesses will weigh on jobs for much of the year."That's likely to be the case, even allowing for the impact in March of unusually cold weather, Zandi said.Not everyone was worried by the poor monthly showing. Neil Dutta, head of economic research for Renaissance Macro Research in New York, cautioned that recoveries don't move in a straight line."From 2004 to 2006, when the labor recovery hit its stride in the last expansion, private employment registered a monthly gain of sub-100,000 a total of 11 times. So, roughly one-third of the time in the last labor market recovery, private employment came in below 100,000," Dutta said. "Yes, that jobs recession was shallower, hence the softer recovery. But let this serve as a reminder that payrolls are volatile. Since 2011, we've seen two sub-100 private payroll prints in addition to this one; that's roughly 11 percent the time."But many found the report from the Bureau of Labor Statistics jarring."This is an extremely troubling labor market report, given how strongly stocks have rallied, and how much expectations have been lifted with optimism around the consumer and housing. This report this morning calls this whole thesis into question," said Scott Anderson, chief economist for Bank of the West in San Francisco. "The negative impact of the [budget] sequester is readily apparent in these numbers, and we can expect more economic difficulty and job loss in the months ahead."The budget sequester took effect March 1 and cut $85 billion in federal spending throughout the federal government, with the exception of Congress and its staff. The Defense Department plans furloughs for its civilian labor force in April, and the prospect of another $100 billion in cuts scheduled to begin Oct. 1, absent a budget deal, have dampened spending by businesses and consumers, many of whose jobs depend directly or indirectly on government or government purchasing.The White House blamed the sequester for Friday's weak jobs report and warned it is adding uncertainty about the year ahead."Now is not the time for Washington to impose more self-inflicted wounds on the economy," Alan Krueger, head of the White House Council of Economic Advisers, said in a statement.Republicans saw it differently."The president's policies continue to make it harder for Americans to find work. Hundreds of thousands fled the workforce last month, and unemployment remains far above what the Obama administration promised when it enacted its 'stimulus' spending plan," House Speaker John Boehner, R-Ohio, said in a statement.