The United States economy contracted at an annual rate of 31.4 percent in the second quarter of 2020, according to the U.S. Commerce Department's Bureau of Economic Analysis.

The final estimate, released on Wednesday, is marginally better than the 31.7 percent forecast a month ago.

The department said a decline in real GDP showed reductions in personal expenditures, exports, investments, and state and local government spending. These were, however, partially offset by an increase in federal government spending.

"The decline in second quarter GDP reflected the response to COVID-19, as 'stay-at-home' orders issued in March and April were partially lifted in some areas of the country in May and June, and government pandemic assistance payments were distributed to households and businesses," a statement from the department read in part.

Moreover, consumer spending, a major driver of the U.S. economy, slowed down last month as the unemployment benefits of large numbers of people came to an end.

The U.S. economy has been hit hard by the coronavirus pandemic. The Democrats and Republicans have struggled to reach a consensus on a new coronavirus relief bill for the public and economy.

Economists have warned that the economy may slip back into a recession if Congress fails to pass another stimulus measure or if there is a resurgence of COVID-19.

House Speaker Nancy Pelosi and White House chief of staff Mark Meadows both said Tuesday they're hopeful they can reach an agreement on the COVID-19 relief package as the stalled talks resumed, according to local media.

(With input from agencies)