The U.S. economy slowed a bit more than initially thought in the second quarter as the strongest growth in consumer spending in 4-1/2 years was offset by declining exports and a smaller inventory build.

Gross domestic product increased at a 2.0% annualized rate, the Commerce Department said in its second reading of second-quarter GDP on Thursday. That was revised down from the 2.1% pace estimated last month. The economy grew at a 3.1% rate in the January-March quarter. It expanded 2.6% in the first half of the year.

The downward revision was in line with ecconomists' expectations.

The economic expansion, now in its 11th year, is under threat from the Trump administration's year-long trade war with China, which has undercut business investment and manufacturing.

The deterioration in trade relations between the two economic giants has roiled global stock markets and triggered an inversion of the U.S. Treasury yield curve, fanning fears of a recession. While manufacturing and housing data suggest the economy continued to slow early in the third quarter, strong consumer spending, backed by the lowest unemployment rate in nearly 50 years, has tempered some concerns about a downturn.

Federal Reserve Chair Jerome Powell told a conference of central bankers last week that the economy was in a "favorable place," but reiterated that the U.S. central bank would "act as appropriate" to keep the economic expansion on track.

The Fed lowered its short-term interest rate by 25 basis points last month for the first time since 2008, citing trade tensions and slowing global growth. Financial markets have fully priced in another quarter-percentage-point cut at the Fed's Sept. 17-18 policy meeting.