The US economy grew at its fastest pace in two years in the third quarter as a surge in exports and a rebound in inventory investment offset a slowdown in consumer spending. 

Gross domestic product increased at a 2.9% annual rate after expanding at a 1.4% pace in the second quarter, the Commerce Department said today in its first estimate. 

That was the strongest growth rate since the third quarter of 2014. 

Economists polled by Reuters had forecast GDP rising at a 2.5% annual rate in the third quarter. 

Despite the moderation in consumer spending, the third-quarter rise in growth could help dispel any lingering fears the economy was at risk of stalling. Over the first half of the year, growth had averaged just 1.1%. 

Though the Federal Reserve is mostly focused on employment and inflation, signs of economic strength would be supportive of an interest rate hike in December. 

The Fedraised its benchmark overnight interest rate last December for the first time in nearly a decade. 

US consumer spending still supported the economy in the third quarter, even as the pace slowed from the second quarter's robust 4.3% rate. 

Consumer spending, which accounts for more than two-thirds of US economic activity, increased at a 2.1% rate. 

A surge in soybean exports helped to shrink the trade deficit in the third quarter. 

Exports increased at a 10% rate, the biggest rise since the fourth quarter of 2013.

As a result, trade contributed 0.83 percentage point to GDP growth after adding a mere 0.18 percentage point in the three months from April to June. 

There are concerns that the soybean-driven export growth spurt could reverse in the fourth quarter. 

Economists, however, also noted that exports of capital and consumer goods have been growing strongly in recent months. 

US businesses increased spending to restock after running down inventories in the second quarter. Businesses accumulated inventories at a $12.6 billion rate in the last quarter, contributing 0.61 percentage point to GDP growth. 

Spending on non-residential structures, which include oil and gas wells, increased at a 5.4% rate in the third quarter, the fastest pace since the second quarter of 2014, after falling at a 2.1% pace in the second quarter. 
             
Investment in mining, exploration, shafts and wells fell at a 31.5% rate in the third quarter after dropping at a 57.4% pace in the second quarter. 

Business spending on equipment dropped for a fourth quarter in a row, slipping at a 2.7% rate. 

While the pace of decline has been ebbing as oil prices stabilise and the dollar's rally gradually fades, a strong turnaround is unlikely in the near-term.