By Rex Nutting
WASHINGTON (MarketWatch) - The U.S. economy expanded at a 3.5% annual pace in the third quarter, as massive government stimulus dragged the economy out of the longest and deepest recession since the 1930s, the Commerce Department estimated Thursday. It was the first increase in real gross domestic product in a year and it was the strongest growth in two years. The 3.5% increase matched estimates of economists surveyed by MarketWatch. In the past year, the economy has contracted 2.3%. The economy shrank 0.7% annualized in the second quarter and 6.4% in the first quarter. Growth was broad-based in the third quarter, with final U.S. sales rising at a 3% annual pace, the fastest in more than three years. Third-quarter growth was due to higher consumer spending, a slowdown in the reduction of inventories, an increase in residential investments, and robust government spending.
