The U.S. Commerce Department says in a report that the recession is over, as the economy grew at a 3.5 percent pace in the third quarter.

Economists had expected a growth rate of 3.3 percent, but the report says government-supported spending on cars and homes helped boost the economy.

The federal "Cash For Clunkers" program last summer offered consumers up to $4,500 in rebates to buy new cars and trade old, fuel-inefficient cars.

The government is also giving an $8,000 tax credit for first-time home buyers. Congress is expected to extend the credit beyond its expiration date of November 30.

Treasury Secretary Timothy Geithner testified before the House Financial Services Committee today that the economy shows positive signs of recovery, but that the recession is still "alive and acute'' for families dealing with unemployment and facing home foreclosure.

The third quarter's growth, which was the best in two years, stops four consecutive quarters of declines that signaled the country's worst recession since the Great Depression.