TOPWRAP 8-Mixed signs on recovery as US consumer mood sours

* Obama says full economic recovery is still a way off

* U.S. consumers in early July in worst mood since March

* French, Italian industry data better than expected

* South Korea growth improves; India output tops forecasts

* Japanese wholesale prices slump, deflation grips

* U.S. stocks end week lower (For more on the financial crisis, click on [nCRISIS])

By Eric Walsh

WASHINGTON, July 10 (Reuters) - The global economic outlook appeared mixed on Friday, with promising data from parts of Europe and Asia offset by a drop in U.S. consumer sentiment, deflation in Japan and a warning from U.S. President Barack Obama that full recovery was still a way off.

Evidence began emerging earlier this year that the world's worst recession since World War Two might be bottoming out, and heartening data from France, Italy, South Korea and India suggest an upturn may not be far away.

Adding to the rosier prospects, the Organization for Economic Co-operation and Development reported that the outlook for its mostly wealthy member nations had improved in May, and said there were signs that the downturn in Canada, Britain, the United States, China and India had bottomed.

"OECD composite leading indicators for May 2009 point to tangible signs of improvement in the outlook of most OECD economies," it said in a report. [ID:nLA471686]

But the view from the world's largest economy has been tempered by a continued rise in unemployment, raising concern about consumers' ability to spend and spur demand.

"Full recovery is still a way off. It would be premature to begin winding down our stimulus plans," Obama said on the final day of a G8 meeting in Italy. [ID:nLA178345]

The Reuters/University of Michigan Surveys of Consumers said its preliminary index of U.S. confidence for July fell to 64.6 from the final reading for June of 70.8, mainly due to mounting concerns about an extended economic downturn, job security and wealth erosion.

July's preliminary reading, the most pessimistic since March, was well below economists' median forecast for 70.5 [ID:nN10508844].

"It underlines the ongoing gloom facing the U.S. consumer and further delays prospects for a near-term recovery. That will weigh heavily on risk sentiment," said Brian Dolan, senior currency strategist with Forex.com in Bedminster, New Jersey.