U.S. economy grew at an annual rate of 2 percent in the July-to-September quarter, slower than the 2.2 percent estimated a month ago, the Commerce Department reported Thursday.

The revised reading on gross domestic product (GDP) was compared with growth of 2.2 percent in the second quarter and 5.6 percent in the first three months of this year.

Data showed the main culprit behind the slowdown in the third quarter was the deepening housing slump. Private investment in home building plunged by 18.7 percent, the biggest drop in 15 years and even steeper than previously reported.

The slowdown in the once-sizzling housing sector shaved 1.2 percentage points off third-quarter growth, the most in nearly 25 years.

For the third quarter, consumers spending increased 2.8 percent, slightly less than previously estimated.

Business spending on equipment and software rose at an annual rate of 7.7 percent, stronger than previously estimated. Investment in new plants and buildings rose by 15.7 percent, less than was estimated a month ago.

An inflation gauge tied to the GDP report showed that core prices, which excludes volatile food and energy, rose at 2.2 percent in the third quarter, unchanged from a previous estimate. There was a 2.7 percent increase in the second quarter.

The GDP measures the value of all goods and services produced within the United States and is the best barometer of the country's economic health. Economists now expect the economy to expand at a pace of 1.7 percent to 2.5 percent in the final quarter of this year.