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That realization sent markets plummeting from New York to Beijing on Friday, with the Dow Jones industrial average wiping out its gains for the year and closing down 275 points or 2.2 percent.

“It’s an unwelcome truth,” said Yuki Sakasai, an economist at Barclays Capital. “Even the U.S., where growth has been modest and manufacturing sentiment firm relative to the euro area and China, may not be immune to the global slowdown.”

The news of slower growth in the U.S. “could not have come at a worse time for markets,” which already had been “grappling with the uncertain European political environment,” he said, and were counting on an island of stability in the U.S.

Bad news catches up

The U.S. for weeks had seemed to be sitting out the global turmoil, basking in the benefit of rock-bottom interest rates and enjoying the relief from high gas prices caused by the collapse in global oil prices. Consumers seemed to be getting a bit of a boost from having extra change in their pockets after they left the service station.

But one report last week — an unexpected fall in consumer confidence reported by the Conference Board — suggested that consumers were not as immune as thought to the gathering gloom.

After that, Friday’s jobs report pulled the rug out from any remaining faith in the U.S. economy as Fortress America.

Nigel Gault, chief U.S. economist at IHS Global Insight, said some of the softness in hiring — particularly the loss of construction jobs in May — was a payback from unusually robust job growth during the winter. But the weakness was widespread enough that it showed businesses are still not convinced of a lasting recovery, he said.

“Given the uncertainties over the eurozone crisis, emerging market growth, the U.S. elections and the ‘fiscal cliff’ [of expiring tax provisions and spending measures at the end of the year], there are plenty of reasons for businesses to stay cautious in their hiring plans, even if surging gasoline prices are for the moment no longer on the list of things to worry about,” he said.

Alan B. Krueger, chairman of the White House Council of Economic Advisers, also attributed the slowdown to powerful recessionary forces coming from overseas.

“Just like last year at this time, our economy is facing serious headwinds, including the crisis in Europe and a spike in gas prices,” he said. “The economy is growing, but it is not growing fast enough” to make much headway in reducing unemployment among millions of Americans.

More dark clouds loom

While the threat from high gas prices is now waning, the turmoil in Europe promises to get only worse in coming weeks as Greek voters consider once again on June 17 whether to stay in the eurozone or leave it, and Spain grapples with a banking crisis that could force it to seek a bailout from its northern neighbors, following the path of Greece, Portugal and Ireland.

Meanwhile, businesses in the U.S. have been roiled by rumblings of another major confrontation like last year’s debt limit battle between Mr. Obama and the Republican-led House of Representatives.

A second partisan war is looming at the end of the year over the expiration of all of President George W. Bush’s tax cuts and big, across-the-board spending cuts that are set to take effect in defense and other government programs unless the two branches can agree on a budget deal.

Story Continues →