The US economy grew 1.6% in the second quarter, revised down from a first estimate of 2.4%.
The figures were better than most analysts had expected.
Recent data on the US economy had raised worries that the US was entering a double-dip recession, dragging the rest of the world with it.
The revised figure was mostly due to the largest surge in imports in 26 years, and a slower build-up of stocks by companies.
Economists had estimated the revision would be sharper for the April-to-June period, down to about 1.3%.
Nevertheless, it still marks a big drop on the growth figure for the previous three months, which stood at 3.7%.
The US economy has now grown for four straight quarters, although that annualised growth rate averaged only 2.9%.
Experts say that the economy needs to grow at about 3% just to keep the unemployment rate, currently 9.5%, from rising.
Analysis
<-- pullout-items--> <-- pullout-body-->The US Commerce Department has confirmed what many people already felt: the economic recovery - which had looked promising earlier in the year - is struggling. The problem with weaker growth is that while many economists talk about the increased risk of a double dip recession, a lot of Americans never felt like they emerged from the first dip.
Such a low level of economic activity means that those out of work will find it difficult to get a job and many companies will be nervous about spending money to grow their business. This poses a problem for Federal Reserve Chairman Ben Bernanke who is addressing the worlds central bankers on Friday.
When he speaks at the annual gathering in Jackson Hole, Wyoming, he will be under pressure to show the Fed stands ready to act to try to prevent another recession.
<-- pullout-links-->Business investment in new machinery, computers and software drove much of the growth last quarter, increasing nearly 25%.
Import surge
But much of that spending involved the purchase of imported goods. Imports surged 32.4%, the most since 1984. That was much larger than the 9.1% increase in exports.
However, the Commerce Department figures also showed that personal consumption by US consumers was higher than expected.
Their spending rose at a 2% annual rate, slightly higher than the first quarters 1.9%.
In the past week, economic data has revealed deep concerns about the health of the US economy.
Sales of new home sank to the lowest levels in half a century, and the manufacturing cuts back capital spending sharply.
The US economy emerged from recession with a 1.6% growth rate in the third quarter of 2009.
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