WASHINGTON—American shoppers increased their spending in June and factories picked up production, adding to evidence the U.S. economy is wrapping up a solid second quarter despite challenges from abroad.

Strong retail sales in June, coupled with an increase in manufacturing output, set the stage for a stronger-than-expected reading for economic growth in the second quarter. After Tuesday’s reports, forecasting firm Macroeconomic Advisers raised its projection for gross domestic product to grow at a 2.1% seasonally adjusted annual rate in the quarter, from a previous forecast of 1.8%.

Despite an overall solid economic picture, increasing risks from global growth and brewing trade tensions are primary concerns the Federal Reserve has cited in signaling it is ready to cut interest rates later this month to cushion the U.S. economy.

“The bottom line for me is the uncertainties around global growth and trade continue to weigh on the outlook,” Fed Chairman Jerome Powell told the House Financial Services Committee last week.

Whereas manufacturing accounts for a small share of the economy, consumer spending fuels more than two-thirds of economic output. Retail sales, a measure of purchases at stores, at restaurants and online, rose a seasonally adjusted 0.4% in June from a month earlier, the Commerce Department said Tuesday.