Traders turned jittery Friday following a government report showing the economy grew by less than expected during the second quarter.

The gross domestic product increased 2.4% last quarter, slowing from first-quarter growth of 3.7%, according to the Commerce Department. The advanced reading fell just shy of the 2.5% growth economists had expected.

The reading marks the second consecutive quarterly drop in GDP growth, and it reflects an increase in U.S. imports, a slowdown in private inventory investment and an uptick in government spending.

The GDP is widely recognized as the broadest gauge of economic activity for any given quarter or year. It measures changes in production and consumption and is often used to handicap employment and earnings trends.

The Commerce report also showed growth of personal consumption and durable goods orders slowed during the second quarter. Consumption rose 1.6% and durable goods increased 7.5%, compared to first-quarter gains of 1.9% and 8.8%, respectively.

The reading could intensify speculation over a double-dip recession and call into question the stability of July s market gains.

Some analysts are maintaining a cautious tone. The suggestion that somehow generating [a previously projected] 3% real GDP growth a year after a bottom is bullish ignores the deep the hole we are still trying to climb out of, David Rosenberg, chief economist and strategist at Gluskin Sheff, wrote in a report. The slowing consumption rate highlights the impact of high unemployment and stagnant wages on the GDP, and substantial growth appears unlikely without a further drop in the unemployment rate.

Government spending could be another weight on the GDP. The amount of GDP created by a $1 increase in government spending needs to be over 1.0 to justify the stimulus, Komal Sri-Kumar, chief global strategist at TCW Asset Management, wrote in a report. Instead, as consumer fears of future debt burden rise and households cut back, each dollar increase in government spending may lower GDP. The private sector would also spend less due to fears that the expansion in government would result in tax hikes and, eventually, a diminished standard of living, he wrote. Businesses would not hire, realizing that the fiscal stimulus is temporary, while the burden of taxes and debt service costs could be longer-lasting.

Other analysts suggest the GDP data point to a slow recovery, but also an economy that is picking up. The economy is certainly not in depression, Brian Wesbury and Robert Stein of First Trust Advisors wrote in a report, adding that final sales should start rising at a faster rate. They project increases in GDP from productivity growth, easy monetary policy and rising corporate profits.