It might be both.. what type of wool are you using? Does your finish look sort of "fluffy" as well? That may mean you need to full longer. The finer the wool the less hairy too.. for that reason I only use 15-18 micron merino when felting scarves.
Yes, some wools are hairier than others! I mostly use merino - it suits what I do.
You can get a really smooth finish by taking things slowly and gently and using tepid water (not hot). The slower the felting and fulling, the smoother the felt. Also, after the initial rubbing, felt and full completely by rolling (instead of 'bashing it about' to full) - it takes forever, but you get smooth felt.
To give you some idea, if you use merino wool, when your piece is fulled it will have shrunk by approx 30% (that obviously varies a bit).
Thanks both. I was using Blue Faced Leicester 26 micron. I think slower and longer is also good advice. I did some more last night and it was much better. (although my arms do ache!) ...no pain no gain.
Thanks for the advice.