WASHINGTON (AP) — The U.S. economy grew at a healthy 3 percent annual rate last quarter, fueled by strong consumer spending and business investment, the government said Thursday in an upwardly revised initial estimate.

The Commerce Department had previously estimated that the country’s gross domestic product – total production of goods and services – grew by 2.8 percent from April to June.

Growth in the second quarter represented a significant acceleration from a sluggish 1.4% growth rate in the first three months of 2024.

Consumer spending, which accounts for about 70 percent of U.S. economic activity, rose 2.9 percent last quarter, up from 2.3 percent in the government’s original estimate. Business investment rose 7.5 percent, led by a 10.8 percent increase in equipment investment.

Thursday’s report reflected an economy that remains robust but is gradually weakening under the pressure of persistently high interest rates.

The economic situation is weighing heavily on voters ahead of November’s presidential election. Many Americans remain angry about high prices, even though inflation has fallen sharply since its four-decade peak in mid-2022.

The Federal Reserve raised its benchmark interest rate 11 times in 2022 and 2023, reaching a 23-year high. That helped bring annual inflation down from a peak of 9.1% to 2.9% last month. The resulting sharply higher borrowing costs for consumers and businesses are expected to trigger a recession. Still, the economy has continued to grow and employers have continued to hire.

Now that inflation is just above the Fed’s 2% target and likely to continue to moderate, Fed Chair Jerome Powell has essentially declared victory over inflation. As a result, the Fed is expected to begin cutting its benchmark interest rate at its next meeting in mid-September.

A prolonged period of lower Fed interest rates is intended to create a “soft landing” in which the central bank succeeds in containing inflation, maintaining a healthy labor market and avoiding a recession. Lower interest rates on auto loans, mortgages and other forms of consumer credit would likely be the result.

The central bank has recently been more concerned with supporting the labor market, which is gradually weakening, than continuing to fight inflation. The unemployment rate has risen for four consecutive months to 4.3%, which is still low by historical standards. The number of job vacancies and the hiring rate have also declined, but remain at relatively solid levels.

Thursday’s report was the Commerce Department’s second estimate of GDP growth in the April-June quarter. The final estimate will be released late next month.