November 7, 2013 8:40 AM, EST

U.S. Economy Expands at 2.8% Rate in Third Quarter

Mark Elias/Bloomberg News

The U.S. economy expanded at a 2.8% annual rate in the third quarter, up from a 2.5% growth rate the previous three months, the Commerce Department said Nov. 7.

The gross domestic product reading was higher than economists’ median forecast of a 2% rate, Bloomberg News reported.

The rise was led by an increase in business inventories to an $86 billion annual pace in the third quarter from $56.6 billion the prior quarter.

GDP measures the value of all goods and services produced.

Consumer spending, which makes up about 70% of the economy, rose at a 1.5% rate, after a 1.8% rise from April to June. Economists called for a 1.6% rise in consumer spending, Bloomberg reported.

“Growth is steady but not that great,” Jonathan Basile, an economist at Credit Suisse, told Bloomberg. “The shutdown will have a temporary effect on this quarter’s growth.”

The Nov. 7 GDP report is the first of three issued for each quarter by Commerce.