Mumbai: The US economy grew faster than expected in the third quarter on strong business investment even as the housing sector registered its biggest fall in more than 15 years.

Gross domestic product (GDP) grew at a 2.2 per cent annual rate during the third quarter, higher than the estimated 1.6 per cent and above market expectations for a 1.8 per cent growth.

Business spending grew at 10 per cent rate against an estimated 8.6 per cent. Spending on inventories rose sharply to $58 billion from $50.7 billion estimated earlier.

Consumer spending, which accounts for roughly two-thirds of national economic activity, increased at an annual rate of 2.9 per cent during the quarter, lower than the estimated 3.1 per cent.

Personal spending excluding food and energy grew at a 2.2 per cent rate during the quarter, down slightly from the estimated 2.3 per cent.

Core prices measured on a year-on-year basis were up 2.4 per cent, same as estimated and the strongest rate since 1995.

Yet, third quarter GDP gain was weaker than the 2.6 per cent advance in the second quarter - and the weakest since last year's Gulf Coast hurricane losses, figures released by the commerce department showed.