The U.S. economy expanded at a sluggish pace this spring as businesses sharply reduced their stockpiles of goods and spent less on new buildings and equipment.

The Commerce Department says gross domestic product, the broadest measure of the economy, increased at an annual rate of 1.1 percent in the April-June quarter. That is slightly below its previous estimate last month of 1.2 percent growth.

Consumers offset the corporate cutbacks by spending at the fastest pace in six quarters. That suggests steady job growth and modest pay gains are fueling healthy demand that could spur faster growth in the second half of this year.

The economy has expanded at a lackluster 1 percent annual pace in the first half of this year, a reminder of the current recovery's weakness.