WASHINGTON — Economic growth at the start of the year wasn’t as bad as initially estimated, boosting the chances that Federal Reserve policymakers will raise a key interest rate next month.

The nation’s total economic output – also known as gross domestic product – increased at a 0.8 percent annual rate from January through March, the Commerce Department said Friday.

Though that was still weak growth, it was an improvement over the initial estimate last month of 0.5 percent. That would have been the worst quarterly performance in two years.

In the second of three revisions to the quarterly growth figures, the Commerce Department said that the decline in business inventory investment was less severe than in last month’s report.

Gross private domestic investment decreased by 2.6 percent in the first quarter from the previous quarter, instead of the initial estimate of a 3.5 percent decline.

Still, that drop combined with declines in exports and federal government spending to cause the economy to slow from the 1.4 percent annual pace in the fourth quarter of last year.

In addition, consumers were more cautious in the first quarter as concerns about global growth triggered a steep downturn in financial markets.

Consumer spending increased 1.9 percent from January through March, down from 2.4 percent in the fourth quarter and the weakest showing in a year.

Economists expect much stronger overall economic growth in the April-through-June period.

A closely watched model from the Federal Reserve Bank of New York forecasts that the economy is growing at a 2.9 percent annual rate in the second quarter. That would be the fastest pace in a year.

Such a rebound would increase the likelihood that Fed policymakers will nudge up a key interest rate when they meet June 14-15.

In public comments at Harvard University on Friday, Federal Reserve Chair Janet Yellen said that an interest rate hike would be appropriate in the coming months if the economy keeps improving.

She said she expects the Fed to “gradually and cautiously increase” its key interest rate “and probably in the coming months, such a move would be appropriate.”

Anticipation of a rate hike at either the next June meeting or in July have been rising since the Fed last week released the minutes of its discussions at its April meeting.

Many private economists still believe a June rate hike isn’t very likely. The gathering will take place only a week before British voters decide whether to support a move to leave the European Union. The Fed may be reluctant to raise rates in advance of the British vote. These analysts believe a hike at the July 26-27 meeting is more likely.