Increased expectations that the European Central Bank will buy bonds of troubled euro zone countries also increased risk-taking and reduced demand for safe haven debt.
Gross domestic product expanded at a 1.5 percent annual rate between April and June, the weakest pace of growth since the third quarter of 2011, the Commerce Department said on Friday.
Treasuries extended price losses as the growth number was not as bad as some analysts and traders had feared, and perhaps unlikely to prompt the Federal Reserve to launch a new round of stimulus when it meets next week.
"The report was a little bit better than what some people feared. I think some people were getting nervous that it would be sub-one percent," said Charles Comiskey, head of Treasuries trading at Bank of Nova Scotia in New York.
Investors will be watching for signs that the Fed will launch a new bond purchase program if the economy continues to weaken, though many analysts and traders see it as unlikely that the central bank will launch a program as soon as next week.
The GDP data nonetheless points to a worsening picture for the US economy in the second half of the year, where investors will also face uncertainty around the November presidential election and the so-called "fiscal cliff" of spending cuts and tax increases that are set to take effect in January 2013.
"The second half of the year is going to be a very challenging one given a lot of the sentiment issues we are dealing with," said Tom Porcelli, chief US economist at RBC Capital Markets in New York.
Investors are still grappling with $99 billion in new two-year, five-year and seven-year notes sold this week, which is adding to the drop in bond prices, said Comiskey.
"We're digesting a lot of supply," he said.
The Federal Reserve also sold $7.93 billion in three-year notes on Friday as part of its Operation Twist program, where it funds purchases of longer-dated debt with sales of short-term notes.
Bonds weakened earlier after French newspaper Le Monde reported that the ECB and euro zone governments were preparing coordinated action to cut Spanish and Italian borrowing costs, boosting demand for riskier assets.
But comments from Germany's powerful Bundesbank added doubts to hopes of bond purchases, with a spokesman from the bank saying that it regards central bank purchases of sovereign debt as monetary financing of governments, from which the ECB is prohibited by European law.
Benchmark 10-year notes were last down 24/32 in price to yield 1.53 percent, up from 1.44 percent late on Thursday.
Thirty-year bonds fell 2-1/32 in price to yield 2.60 percent, up from 2.50 percent on Thursday.