The momentum driving the U.S. economy has decelerated, with the Bureau of Economic Analysis revising growth projections for the second quarter of the year in a downward direction.

The U.S. economy experienced a quarter-on-quarter expansion of 2.1% on an annualized basis in the second quarter of 2023, well below than the initial estimate of a 2.4% growth.

The second estimate incorporated downward adjustments to private inventory investment and nonresidential fixed investment, which were somewhat counterbalanced by upward revisions in state and local government spending, exports, consumer spending, federal government spending, and residential investment. There were upward revisions in imports as well.

Among private inventory investment, the downward adjustment was primarily driven by the wholesale trade sector, particularly in nondurable goods. The revision in nonresidential fixed investment stemmed from lower revisions in equipment and intellectual property products.

The PCE price index - the Fed's preferred measure of inflation - underwent a downward revision, moving from 2.6% to 2.5%, along with a similar adjustment for the core PCE price index, which shifted from 3.8% to 3.7%.

Earlier on Wednesday, the ADP National Employment Report showed that private businesses in the U.S. added 177,000 employees in August 2023, down from 324,000 increase in July and missing market expectations of a 195,000 rise.

Traders now anxiously await other key economic releases for the remainder of the week, including the Fed's preferred measure of inflation on Thursday and the August jobs report on Friday.