US gross domestic product, a measure of total output within the nation's borders, climbed at a modest 3 percent annual pace in the April-June period after an upwardly revised 4.5 percent clip at the start of the year, the Commerce Department said.

Wall Street economists had looked for GDP to slow less sharply to a 3.6 percent pace after the first-quarter's previously reported 3.9 percent advance, and said they were surprised by the big pullback in consumer spending.

The dollar slipped against the euro, while prices for U.S. bonds move higher after the data as investors bet on an easier pace of interest-rate rises from the Federal Reserve. The stock market was expected to open lower on the news.

"We're looking at a more pronounced than expected slowing of economic activity, mostly because of the shockingly small increase by consumer spending," Moody's Investors Service chief economist John Lonski said.