Economic growth in the United States in the second quarter has been revised to 1.1% - down from the 1.2% rate estimated last month.
While consumer spending rose, retailers cut prices to shift stock. Federal and local government spending were also lower than expected.
The economy grew by 0.8% in the first quarter and 1% during the first half of 2016.
Last week, Federal Reserve chair Janet Yellen raised expectations of an imminent interest rate hike in the US following a speech at a three-day gathering of central bankers in Wyoming.
She said that employment data and growth expectations have strengthened the case for a rate increase.
"US economy was nearing the Federal Reserve’s statutory goals of maximum employment and price stability," she told the audience. The Fed's Open Market Committee has three meetings left in 2016, in September, November, and December.
"In light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months," she continued.