Gross domestic product rose at a 1.2 percent annualized rate after a 0.8 percent advance the prior quarter, Commerce Department figures showed Friday in Washington.
The U.S. economy expanded less than forecast in the second quarter after a weaker start to the year than previously estimated as companies slimmed down inventories and remained wary of investing amid shaky global demand.
The U.S. central bank has left the door open for a rate increase during 2016, but given the Q2 GDP numbers, traders believe that is unlikely.
Previous Fed minutes led traders to believe that the Fed may raise rates from 0.50 to 0.75 during the December FOMC meeting. According to the CME Group's Fedwatch tool, the current implied probability of a hike from 0.50 to 0.75 is at 12 percent at the September 2016 meeting, 14 percent at the November 2016 meeting, and 34 percent at the December meeting.
The Federal Reserve could raise interest rates up to two times before year end, a top Fed official said on Friday as he downplayed data that showed the U.S. economy grew far less than expected in the last quarter.
The Bank of England (BoE) must decide over the coming week how much trouble Britain's economy is in following the shock vote to leave the European Union, and how much firepower it can throw at the problem.
A Reuters poll of economists published on July 26 predicted the British central bank would cut its benchmark Bank Rate to 0.25 percent from 0.50 percent on Aug. 4, but most said it would not revive its massive bond-buying program for now.
The bank might take interim measures to help the economy, such as more encouragement for bank lending, while it waits for clearer signs of the extent of the Brexit hit to the economy.
Until now, it has not had to contemplate the kind of radical decisions taken by the BoJ and the European Central Bank (ECB), both of which have cut interest rates below zero as they try to spark their economies into life.
Brent crude oil futures were down 21 cents at $42.49 by 2:39 p.m ET, down 0.49 percent on the day.
U.S. West Texas Intermediate (WTI) crude settled up 46 cents, or 1.12 pct, at $41.60 a barrel, and last rose 34 cents to $41.48 a barrel, but was set to end the month near its biggest decline since July 2015.
Oil prices steadied on Friday amid short-covering after a week-long selloff but were on track to end the month about 15 percent lower on persistent glut concerns.
A three-week low in the dollar also supported oil, making commodities denominated in the greenback, such as crude, more affordable to holders of the euro and other currencies.
Oil futures climbed Friday, finding some support from weakness in the U.S. dollar, but West Texas Intermediate crude still logged a loss of about 14% for the month, the largest monthly percentage decline in a year, on lingering concerns about crude oversupply and a deluge of refined products.
Reference: Reuters, Bloomberg, CNBC, Market Watch