Australia's GDP rose 0.6 percent in September quarter

Australian interest rates

Australia's GDP rose 0.6 percent in September quarter

Australia's gross domestic product expanded a seasonally adjusted 0.6 percent on quarter in the third quarter of 2017, the Australian Bureau of Statistics said on Wednesday.

This left the annual at 2.8 per cent, up smartly from 1.8 per cent previously as the 0.4 per cent growth contraction recorded in the September quarter 2016 dropped out of the equation.

New engineering construction increased 6.3 percent, while household final consumption expenditure gained 0.1 percent for the quarter.

So far this year, Australia has experienced the strongest jobs growth in 40 years, with four out of five jobs being full-time, Mr Morrison said.

Economic growth was also impacted by a 7.5 per cent decline in public investment during the quarter, as government spending returned to normal after the previous quarter's growth was inflated by the one-off South Australian government acquisition of the Royal Adelaide hospital.

The spending figure was so weak because households pulled back significantly on spending at cafes and restaurants, on recreation, household goods, alcohol and tobacco and health services. The household saving ratio increased from 3% to 3.2%.

The Australian dollar slid about a quarter of a USA cent as market participants essentially lowered their expectations that Australia's central bank-already in a lengthy holding pattern-will take action on interest rates anytime soon.

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The biggest fall in the September quarter was in agriculture, forestry and fishing, which declined by 4.1 per cent.

Growth in household spending is now at its lowest rate since the March quarter in 2005.

Corporate sentiment is high, buoyed by strengthening global growth and robust exports, contributing to a jump in private investment over the quarter.

"This print will come as a major disappointment for the RBA", Westpac's chief economist, Bill Evans, said.

But a cloud still hangs over the Australian consumer, with record household debt, years of record-low wages growth, and, more recently, softening house prices.

"While total compensation of employees was solid at 1.2% quarter-on-quarter and 3% over the year, this is nearly entirely due to strength in employment rather than wages", he said.

Mr Morrison highlighted strong jobs growth as one of the most positive signs in the economic figures.

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