In this Sept. 4, 2014, photo, Cynthia Dodd-Simonson shops at a Family Dollar store in Wilmington, N.C. The U.S. economy grew at a sizzling 5 percent annual rate in the July-September period, the fastest since 2003, fueled by higher consumer spending and business investment.WASHINGTON — A surge in U.S. economic growth lifted stocks Tuesday to record highs and showed that the United States is putting distance between itself and struggling economies around the world.
Fueled by hiring gains, cheaper gas and rising confidence, consumers and businesses drove growth to a sizzling 5 percent annual rate last quarter. Though the economy is likely cooling a bit, its solid pace is brightening hopes for 2015.
The economic strength could also shape the Federal Reserve’s timetable for raising interest rates from record lows.
The government’s third and final estimate of growth for the July-September period was the strongest for any quarter in 11 years. The result cheered investors. In midafternoon trading, the Dow Jones industrial average was up about 93 points to 18,053, the first time it’s traded above 18,000.
In its report Tuesday, the government sharply upgraded third-quarter growth from its previous 3.9 percent estimate. Much of the increase came from consumer spending on health care and business spending on structures and software.