* U.S. March payroll growth 88,000, less than forecast
* Wall Street fall at open, European shares down 2 pct
* Dollar index falls 0.3 percent, Treasuries rally
NEW YORK, April 5 (Reuters) - Major stock markets tumbled, the dollar fell, while Treasury prices rallied on Friday after a much weaker-than-expected U.S. jobs report added to fears the U.S. economic recovery was losing steam.
Brent crude oil fell to a five-month low as bleak U.S. jobs data and bulging inventories dimmed the outlook for economic growth and fuel demand. Safe-haven gold prices rose.
U.S. employers hired at the slowest pace in nine months in March, adding just 88,000 nonfarm jobs, below an expected 200,000, the Labor Department said. The jobless rate ticked a tenth of a point lower to 7.6 percent, but largely due to people dropping out of the work force.
Fears had already been growing about the U.S. recovery before the jobs report due to weaker-than-expected data this week on manufacturing activity and private sector hiring.
"The report will fuel concerns about another spring swoon for the economy, the adverse impact of Congressional dysfunction and, more generally, the weak underlying dynamism of the economy," said Mohamed El-Erian, co-chief investment officer at Pacific Investment Management Company.
The MSCI world stocks index slipped 0.9 percent to 355.54 points.
The Dow Jones industrial average dropped 168.49 points, or 1.15 percent, to 14,437.62. The Standard & Poor's 500 Index fell 19.40 points, or 1.24 percent, to 1,540.58. The Nasdaq Composite Index lost 55.15 points, or 1.71 percent, to 3,169.83.
European shares tumbled 2 percent to 1157.61 points.
The dollar was down 0.2 percent against a basket of major currencies to 82.496. The euro rose 0.5 percent to $1.2998 . Against the yen, the dollar rose 0.3 percent to 96.58 yen.
Brent crude fell to a low of $104.92, its lowest since Nov. 5, before recovering slightly to trade around $105.24, down $1.12. U.S. crude dropped 77 cents to a low of $92.49.
Spot gold rose to $1,567.81 an ounce from $1,552.71.