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The department's new estimate for the second-quarter gross domestic product (GDP) was unchanged from the initial figure it released last month.
The drop, while representing a record fourth consecutive decline, was far smaller than the previous two quarters. It also was stronger than the 1.5 percent decline that private economists expected.
The new GDP estimate, the department said, was based on more complete sources than that of the estimate issued last month. In the previous estimate, the real GDP decrease was also 1.0 percent.
In the first quarter, the U.S. real GDP contracted at a much deeper 6.4 percent.
The revision showed a drop of 1.0 percent in consumer spending, the main driver of economic activity, instead of a prior estimate of a 1.2 percent decline.
Federal spending increased 11.0 percent in the second quarter, in contrast to a decrease of 4.3 percent in the first.
The housing sector remained a drag on the economy, with real residential fixed investment falling by 22.8 percent, compared with a decrease of 38.2 percent in the previous quarter.
Exports fell 5.0 percent while imports decreased 15.1 percent, a phenomenon that could contribute to GDP growth.
Businesses cut inventories more than initially expected but that weakness was offset by upward revisions in other areas.
Analysts said that the unchanged revision of the real GDP in the second quarter was a positive signal to the U.S. economy.
Political leaders, though, were not that optimistic.
"We are a long way away from a completely healthy financial system and a full economic recovery." President Barack Obama said two days ago when he nominated Federal Reserve Chairman Ben Bernanke for a second term.
Unemployment, home foreclosures and bank failures are still mounting in the U.S.