The US economy contracted at an annualised rate of 1.0% in the second quarter, figures from the BEA have shown.
The BEA also revised down the first-quarter GDP figure to -6.4% - the largest decline since 1982. It was previously estimated as -5.5%.
Consumer spending, which accounts for two-thirds of US GDP, fell by 1.2%, after rising by 0.6% in 2009q1. Also weighing on overall GDP was the record fall in inventories, as firms shed $141bn of stock, compared with $114bn in the first quarter.
Partially offsetting these negative effects was higher government spending which increased almost threefold in the second quarter. Lower import volumes and smaller declines in business and residential investment also moderated the slowdown.
Although it is widely expected the US will return to growth by the end of the year, any recovery is likely to be weak. The relatively weak dollar will continue to help the competitiveness of US exports but, without a pick up in global demand, the impact on growth from trade will be muted.
It is unlikely that consumer spending will contribute significantly to growth either. Consumer confidence is already at historic lows and has fallen in the past three months.
Rising unemployment, which is not expected to peak until next year, will drag consumer spending down further.