US and European shares fell Friday, with the latest US jobs report and higher inflation expectations capping the end of a volatile week marked by concerns over a trade war.

Official data showed the United States added fewer jobs than expected in January while unemployment ticked down.

The jobs data missed expectations, but Wall Street's three main indexes initially rose. They quickly fell into the red, however, after separate data showed US consumers now expect inflation to jump.

The Dow Jones Industrial Average closed down one percent at 44,303.40, the S&P 500 also lost one percent to 6,025.99 and the Nasdaq Composite fell 1.4 percent to finish at 19,523.40.

President Trump's remarks on unspecified "reciprocal tariffs" also appeared to reignite concerns.

Trump said at a press conference with Japanese Prime Minister Shigeru Ishiba that he was "probably meeting on that Monday or Tuesday," saying that this would be "opposed to a flat-fee tariff" approach.

"Today's (jobs) data does not show a large enough divergence from expectations to shift what is expected to be the Fed's next rate move," said Jochen Stanzl, chief market analyst at CMC Markets.

"Still the Fed is expected to cut the Fed Funds rate twice this year and today's data does not really give a hint into when the first cut will be," Stanzl said.

The Fed kept its rate unchanged last week, with chair Jerome Powell saying the central bank was in no "hurry" to adjust borrowing costs again.

The Labor Department said total US employment rose by 143,000 jobs last month, which was significantly lower than the revised 307,000 figure in December.

The January figure was also below an analyst consensus estimate of 155,000 according to Briefing.com.

"We do not think that the labour market data shifts the dial for the Fed," said Kathleen Brooks, research director at XTB trading platform.

But data released afterward subsequently showed US consumer sentiment fell to its lowest level in July, with survey respondents reporting feeling less confident and more concerned about inflation.

Year-ahead inflation expectations rose to 4.3 percent, up a full percentage point from a month earlier.

"Such a substantial one-month rise of one percentage point or more has occurred only five times in the past 14 years," noted Axel Rudolph, Senior Technical Analyst at online trading platform IG.

The jump in inflation expectations follows a turbulent week for stock markets and currencies after Trump imposed tariffs on China.

The US leader also warned that the European Union would face tariffs "pretty soon" while he delayed duties on Canada and Mexico at the 11th hour. (AFP)