Stock index futures were sharply lower on Friday, with the S&P 500 and Nasdaq set to drop more than 2 percent at the open, after the May payrolls report showed private hiring slowed sharply.

The Labor Department said 431,000 jobs were added to the U.S. economy, but of that total, 411,000 workers were hired for the U.S. Census. Wall Street looked for payrolls to rise by 513,000.

This shows that the economy is a lot weaker than most people had suspected, said Gary Shilling, president of an investment research firm in Springfield, New Jersey. It raises the risk of a double-dip recession.

The data came a day after a private employment report and weekly jobless claims data showed an improved labor market, though not as much as expected.

S&P 500 futures fell 23.9 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures sank 190 points and Nasdaq 100 futures plummeted 44.25 points.

Futures was already in negative territory before the payrolls report, tracking European equities on concerns about Societe Generale's derivatives business. Also, investors worried about the sovereign debt crisis spreading after a spokesman for Hungary's prime minister said the country was at some risk of a Greek-style fiscal crisis. The euro fell to a four-year low against the dollar.

BP Plc made strides in its bid to stop the massive oil spill in the Gulf of Mexico and capture oil spewing from a ruptured well. Still, BP's U.S.-listed shares fell 2.9 percent to $38.14 premarket.

Policymakers from the Group of 20 nations expressed concern Friday about the health of the world economy as they closed ranks behind the euro zone's efforts to tackle a debt crisis that has rattled global markets.

Martek Biosciences Corp reported second-quarter earnings late Thursday that beat expectations and forecast full-year revenues above consensus.

Three top Federal Reserve officials said Thursday it may soon be time to begin raising interest rates as the U.S. economic recovery gathers momentum despite persistently high unemployment.

Wall Street rose for a second straight day on Thursday, with the Nasdaq advancing 1 percent on a late-day surge in technology shares.

(Editing by Jeffrey Benkoe)