The U.S. economy expanded at a 3% annual rate in the first quarter, according to revised Commerce Department data released Thursday. That pace was below an earlier estimate of 3.2%, reflecting a softer reading on consumer spending.

The downgrade suggests households cooled their purchases more than initially thought, a development that can weigh on overall growth because consumer activity drives much of the U.S. economy. The revision also underscores how closely policymakers and investors are watching demand as they assess the outlook for the rest of the year.

The first-quarter figure still points to continued expansion, but at a slower pace than previously reported. Economists will now look for signs of whether the spending slowdown was temporary or the start of a broader pullback by consumers facing tighter financial conditions.