Growth in the US has missed its forecast - raising new questions regarding the impact of depressed oil prices and weakness in the global economy on its recovery.
GDP expanded by 1.2% year-on-year during the quarter according to new stats from the Bureau of Economic Analysis - this figure was expected to be closer to 2.5%.
This was an improvement on the annualised rate of 0.8% in the first quarter.
Positive employment data from last month had fueled speculation that the Federal Reserve would boost interest rates in September - these growth figures make that less likely.
The short-fall was led by slowing investment by companies, and weaker-than-expected investment in property.
If interest rates remain unchanged in September they are likely to hold until after November's US Presidential Election.
The Fed indicated in late-2015 that there would be a number of rate hikes during this year - but these plans were delayed by the turmoil that hit global markets during the first quarter of 2016.
