U.S. economic growth slowed to 2.1 percent in the second quarter, down from 3.1 percent from the first quarter, and the slowest pace in more than two years.

A surge in consumer spending blunted some of the drag from declining exports and a smaller inventory build, which could further allay concerns about the economy's health.

Weakened business investment, the slowing global economic growth and falling oil prices also contributed to the slowing GDP growth. The second quarter data did not meet the three percent growth target that U.S. President Trump had previously "required". 

Consumer spending increased 4.3 percent. Business investment dropped 0.6 percent. Spending on structures dropped 10.4 percent. Housing investment dropped 1.5 percent.

Gross domestic product increased at a 2.9-percent-rate last year, the U.S. Commerce Department said on Friday, confirming an estimate, which was published in March. The department's annual revisions to GDP data also showed the economy growing 2.5 percent in the 12 months through the fourth quarter of 2018, down from the previously reported 3.0 percent.

The White House and Republicans have argued that the massive tax cuts, which included slashing the corporate tax rate to 21 percent from 35 percent, would pay for themselves through strong economic growth. Democrats assailed the tax cuts as benefiting wealthy Americans at the expense of the middle-class.

Economy shows low gear

The updated GDP data, and signs that the economy shifted into lower gear in the second quarter after receiving a boost from exports and an accumulation of unsold goods in the first three months of 2019, are undercutting that argument.

Growth in the first quarter of 2018 was revised up to a 2.5 percent annualized rate from 2.2 percent. Second-quarter growth, which prompted Trump's mission accomplished declaration, was cut to a 3.5-percent-pace from a 4.2-percent-rate. Growth in the third quarter was slashed to a 2.9-percent-rate from a 3.4-percent-pace. Fourth-quarter GDP growth was lowered to a 1.1-percent-pace from a 2.2-percent-rate.

The downward revisions to the three quarters largely reflected downgrades to business investment, suggesting corporations likely did not plow their tax windfall back into their businesses. Some companies like Apple used their windfall for share buybacks.

Many analysts believe that the second-quarter GDP data has little impact on the Fed's decision to cut interest rates. The Fed will meet next Tuesday and Wednesday to discuss whether to cut interest rates.

The Dow rose 0.23 percent, Nasdaq rose 0.24 percent, and S&P 500 rose 0.19 percent after the data was released.

Read more: U.S. stocks slide over disappointing earnings reports

(With input from Reuters)