The Australian economy is back growing again, swelling by 3.3 per cent in the three months to the end of September.

The Australian Bureau of Statistics on Wednesday reported a surge in consumer spending drove the growth which is the highest quarterly jump in activity since the late 1960s.

A surge in consumer spending drove the economic growth.Credit:Joe Armao

Annual growth, however, is still negative and the economy remains 3.8 per cent smaller than it was a year ago.

GDP per capita increased by 3.2 per cent in the quarter after falling by 7.2 per cent in the June quarter.

The head of national accounts at the ABS, Michael Smedes, said the easing of social distance and trading conditions through the quarter had helped drive the result.

He said household spending was up by 7.9 per cent after falling by 12.5 per cent in the June quarter. Spending on services jumped by 9.8 per cent as restrictions on hotels, cafes and restaurants eased.

Demand for goods rose by 5.2 per cent.

In a sign of the impact of Victoria's coronavirus restrictions through the quarter, household spending there fell by 1.2 per cent.

Household spending was up by 11.7 per cent in WA and by 11.6 per cent in Queensland.

While spending was up, it is well short of where it was a year ago.

"Despite record quarterly growth in household spending, the level in the September quarter was 6.8 per cent lower than that recorded in December Quarter 2019," Mr Smedes said.

Households still have a lot of money in the bank.

The household savings ratio fell from an upwardly revised 22.1 per cent to 18.9 per cent.

State final demand jumped by 6.8 per cent in both NSW and Queensland through the quarter while it fell by 1 per cent in Victoria.

The accommodation sector enjoyed the biggest bounce in the quarter, with production up by 41 per cent. Despite the improvement, it is still down 19.7 per cent over the year.

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