Slower economic growth in the United States pushed global stocks lower Friday. The U.S. Commerce Department reports the country's gross domestic product, the broadest measure of the nation's economic health, grew by a disappointing 2.4 percent in the second quarter.
Economists blame the slower pace of growth on continuing high unemployment and falling consumer confidence.
Worried consumers cut back on spending between April and June, slowing down the pace of growth in the world's largest economy to just 2.4 percent. That's a sharp drop from the revised figures from January to March when the U.S. economy grew 3.7 percent.
Investment strategist Peter Cardillo said, "The reason is the high unemployment level. People are afraid. They're not going to go out and spend unless they have to spend. They're spending on the minimums and of course you know paying down debt is great but it also impacts the economy in a negative way."
Consumer spending accounts for 70 percent of U.S. economic activity. And with unemployment expected to remain near 10 percent for the rest of the year, a new study by the University of Michigan shows consumers have grown more pessimistic.
But President Barack Obama was upbeat Friday in a speech to U.S. automakers. He said the GDP report marks the fourth straight quarter of economic growth. He reminded Americans that the U.S. economy was shrinking about six percent per quarter when he took office -- and shedding an average of 700,000 jobs a month. "Our economy is growing again instead of shrinking. That's a welcome sign compared to where we were, but we've got to keep increasing that rate of growth, and keep adding jobs so we can keep moving forward," he said.
Despite falling more than half a percent in early trading on fears of a slow recovery, U.S. stock prices edged higher Friday on better than expected corporate earnings.
Asian stocks closed mostly lower Friday due to worries about about high unemployment in Japan, while European indexes were mixed.