WASHINGTON, June 29 (Reuters) - The U.S. economy slowed less sharply in the first quarter than initially estimated due to unexpectedly higher consumer spending and a bigger jump in exports.

An H&M store has sale signs in the window in New York City, U.S., August 11, 2016. Picture taken August 11, 2016. REUTERS/Joe White

Gross domestic product increased at a 1.4 percent annual rate instead of the 1.2 percent pace reported last month, the Commerce Department said in its final assessment on Thursday.

It was still the slowest growth rate since the second quarter of last year. Economists polled by Reuters had expected GDP growth to remain unchanged at a 1.2 percent rate.

GDP for the January-March period tends to underperform relative to the rest of the year due to perennial issues with the calculation of the data the government has said it is working to resolve.

First-quarter economic growth was boosted by an upward revision to consumer spending, which accounts for more than two-thirds of U.S. economic activity. Consumer spending rose at a 1.1 percent rate instead of the previously reported 0.6 percent pace. It was still the slowest pace since the second quarter of 2013.

Despite the upward revision, the Trump administration’s stated target of swiftly boosting U.S. growth to 3 percent remains a challenge.

A sustained average of 3 percent growth has not been seen since the 1990s. Since 2000, the U.S. economy has grown at an average 2 percent rate. The U.S. economy expanded 1.6 percent in 2016, the lowest rate in five years.

President Donald Trump’s economic program of tax cuts, regulatory rollbacks and infrastructure spending has yet to get off the ground five months into his presidency.

Initial signs that economic growth re-accelerated sharply in the second quarter have also faltered with recent disappointing data on retail sales, manufacturing production and inflation. Housing data has also been mixed. The Atlanta Federal Reserve currently forecasts annualized GDP growth of 2.9 percent in the second quarter.

Exports in the first quarter were revised to show a gain of 7.0 percent from the previously reported 5.8 percent.

Business spending on equipment was revised to show it increasing at a 7.8 percent rate in the January-March period rather than the 7.2 percent previously estimated.

Businesses accumulated inventories at a rate of $2.6 billion in the first quarter, rather than the $4.3 billion reported last month. Inventory investment rose at a $49.6 billion rate in the fourth quarter of last year.

Inventories subtracted 1.11 percentage point from GDP growth instead of the 1.07 percentage point previously reported.

The government also reported that corporate profits after tax with inventory valuation and capital consumption adjustments fell at an annual rate of 2.7 percent in the first quarter after rising at a 2.3 percent pace in the prior three months.