WASHINGTON (MarketWatch) — The U.S. economy accelerated to its highest pace of growth in the past 11 years during the third quarter, an unexpectedly strong revision as consumer spending was stronger than first estimated.

Gross domestic product — the value of all goods and services produced by the U.S. — grew at a real 5.0% annual rate in the third quarter, the Commerce Department said Tuesday. That’s up from a prior reading of 3.9% and an initial estimate of 3.5%.

This is the fastest pace of growth since the third quarter of 2003. Economists polled by MarketWatch had expected Q3 GDP to be revised up to a 4.4% rate.

After the strong report, the Dow industrials DJIA, -1.84% crossed 18,000 for the first time at the open and held its gain through midday with the index up 87 points to 18,046.

The even faster pace of growth stemmed from stronger consumer spending and business investment. Inventory investment was also revised higher.

Consumer spending was revised up to 3.2% from 2.2%, led by purchases of durable goods.

Spending on business fixed investment was revised to 7.7% from 5.1%.

Spending on structures such as plants and office buildings was revised up to 4.8% from 1.1%, while spending on equipment was raised to 11.0% from 10.7%.

The gain in business inventories was revised to $82.2 from $79.1 billion, a high level that could induce companies to scale back a little in the fourth quarter and perhaps impinge on growth.

Economists polled by MarketWatch predict the economy is likely to expand at a 2.5% pace in the October-to-December period.

In a sign of momentum already ebbing, U.S. durable goods orders unexpectedly fell in November, down 0.7%, the third decline in the past four months.

Final sales of domestic product – GDP less the change in inventories — increased 5% in the third quarter, the fastest pace since the first quarter of 2006.

Inflation as measured by the PCE index slipped to at a 1.2% annual rate.

Analysts said the data was not a game-changer for the Fed and still expected the first rate hike to come in the summer.