The numbers: The U.S. gained just 103,000 new jobs in March to mark the smallest increase since last fall, but the latest report on employment still shows the tightest labor market in nearly two decades.

Economists polled by MarketWatch had forecast a 170,000 uptick in new nonfarm jobs.

The unemployment rate, however, clung to a 17-year low of 4.1% and it’s expected to go even lower in the months ahead. Job openings are at a record high and big and small firms alike say they plan to add more workers.

Although the number of new jobs created slowed sharply from February’s revised 326,000 increase, the U.S. added an average of 202,000 jobs a month in the first quarter. That’s still faster than the average gains in 2017 and 2016.

The tight labor market is slowly pushing up worker pay. Hourly wages rose 8 cents, or 0.3%, to $26.82 in March. The 12-month increase in pay edged up to 2.7% from 2.6%. For much of the nearly nine-year-old expansion, wage gains averaged around 2% a year or a bit less.

The Federal Reserve is watching the unemployment rate and rate of wage gains closely for signs of inflation in trying to determine how many times to raise interest rates this year. The latest numbers won’t induce much alarm.

Read: Fed’s Powell expected to dismiss hot-economy talk from Dimon and Yellen

And:Weak jobs report gives Fed more time to decide on four hikes this year

What happened: The pace of hiring was expected to slow in March after a huge gain in February that matched the biggest increase in almost three years.

Unseasonably warm weather boosted employment in the late winter, but as a result some industries such as construction trimmed payrolls last month. Constructions firms shed 15,000 jobs one month after posting the biggest gain in 11 years. Retailers also eliminated 4,000 jobs.

The strongest job gains took place in manufacturing, health care and white-collar businesses. Manufacturers stayed on a roll, adding 22,000 workers. Health-care providers also hired 22,000 people. Professional firms boosted employment by 33,000.

While the government raised its estimate of new jobs created in February to 326,000 from 313,000, it cut its estimate for January to 176,000 from 239,000. The upshot: Hiring was very good in the first quarter, but not quite as good as it first looked.

Big picture: The economy is still churning out plenty of new jobs despite the lowest unemployment rate in 17 years and the fewest layoffs since the early 1970s. The tight labor market is also forcing companies to offer higher pay or better benefits to attract or retain employees.

A robust labor market is likely to keep the U.S. economy growing through next year, with recent tax cuts and higher government spending adding to the tailwind.

Yet there are potential landmines on the road ahead. The Trump administration is fighting a series of battles with key trading partners that’s rattled stock markets and threaten the strongest global economy in years.

Read:Conservatives fear trade war may cripple tax-cut message

The Fed has also embarked on a series of increases in interest rates to ensure the economy does not build up an excessive head of steam that triggers a bout of higher inflation.

What they are saying?: “A disappointing payroll figure, but the trend remains strong,” said chief economist Scott Brown of Raymond James. “Weather appears to have been a factor in both February [on the plus side] and March [on the negative side].”

Read:Jobs trend still strong after ‘disappointing’ March number, economists say