The U.S. economy grew faster than initially thought in the third quarter, notching its quickest pace in three years, buoyed by robust business spending on equipment and an accumulation of inventories.

Gross domestic product expanded at a 3.3 percent annual rate last quarter also boosted by a rebound in government investment, the Commerce Department said in its second GDP estimate on Wednesday. That was the fastest pace since the third quarter of 2014 and a pickup from the second quarter's 3.1 percent rate.

The economy was previously reported to have grown at a 3.0 percent pace in the July-September period. It was the first time since 2014 that the economy experienced growth of 3 percent or more for two straight quarters.

The growth pace, however, likely exaggerates the health of the economy as inventories, goods yet to be sold, accounted for nearly a quarter of GDP growth. Excluding inventory investment, the economy grew at a 2.5 percent rate.

When measured from the income side, output also expanded at a 2.5 percent rate. Economists had expected that third-quarter GDP growth would be raised to a 3.2 percent rate. The brisk growth pace strengthens the case for the Federal Reserve to raise interest rates next month. The U.S. central bank has increased borrowing costs twice this year.

Fed Chair Janet Yellen told lawmakers on Wednesday "the economic expansion is increasingly broad-based across sectors," and that she expected that "the economy will continue to expand."

Prices for U.S. Treasuries were trading lower, while the dollar was little changed against a basket of currencies. U.S. stocks were mixed.

The economic recovery since the 2007-2009 recession is now in its eighth year and showing little signs of fatigue. The economy is being powered by a tightening labor market, which has largely maintained a strong performance that started during former President Barack Obama's first term.

Economists see a modest boost to growth from efforts by President Donald Trump and his fellow Republicans in Congress to push through a broad package of tax cuts, including slashing the corporate income tax rate to 20 percent from 35 percent.

Trump wants lower taxes to lift annual GDP growth to 3 percent on a sustained basis. The fiscal stimulus would, however, come when the economy is at full employment.

"Corporate and personal income tax cuts will have minimal impact on growth over the longer run," said Gus Faucher, chief economist at PNC Financial in Pittsburgh. "In 2019 and beyond growth will settle in to its long-run average of 2 percent to 2.25 percent."