WASHINGTON — The U.S. economy grew at a sizzling 5 percent annual rate last quarter, the fastest since 2003, fueled by consumer and business spending, federal government said today.

The surge confirmed that the economy is steadily improving and outshining others around the world.

The news helped lift the Dow Jones industrial average above 18,000 for the first time. And it could shape the Federal Reserve’s decision on when to raise interest rates from record lows.

In early-afternoon trading, the Dow was up about 100 points.

In its report today, the government sharply upgraded third-quarter growth from its previous 3.9 percent estimate. Much of the increase came from consumer spending on health care and business spending on structures and software.

The economy has been benefiting from sinking energy prices. Gas prices have fallen for 88 days, according to AAA, the longest consecutive decline on record. That has freed up money for Americans to spend on other items, including cars, clothes and appliances.

Last quarter’s economic expansion was the fastest since summer 2003, and it followed a 4.6 percent annual rate in the April-June quarter.

“After four years of rocky recovery the U.S. economy is now hitting its stride, with a notable acceleration in growth in recent quarters,” said Gus Faucher, senior economist at PNC Financial Services Group. “And growth should remain good next year, with lower gasoline prices a big plus for consumers.”