Australia’s economy took a step up in the June quarter, growing 0.8 per cent, an improvement on the anaemic 0.3 per cent recorded in the the three months to March, according to the Australian Bureau of Statistics.

Over the year to June the increase was 1.8 per cent but the June quarter estimate is slightly below that at 1.7 per cent, suggesting a weakening later in the year.

However, while the economic picture may have brightened “it hasn’t got economists breaking open a bottle of Moët,” said Nicki Hutley, chief economist with Urbis group.

The GDP boost was driven by an 0.7 per cent jump in household spending accounting for half of the gain as consumers handed over more of their money.

The business picture was also brighter with an improvement in spending on business and financial services, telecommunications and manufacturing.

But falling commodity prices acted as a weight, taking 0.1 per cent off the GDP result. ABS economist Bruce Hockman said: “Recent indicators showing increased business confidence appear to be reflected by the 3.2 per cent quarterly increase in purchases of new machinery and equipment.”

“We’re on an improving trend, but it’s a rebound from the weak first quarter,” Ms Hutley said. “There’s no way its going to run up to 3 per cent in the near future and we’re not looking for a rate increase from the RBA into next year.”

Stephen Koukoulas, an independent economist, said a breakdown of the growth figures showed “a few snippets were ok but basically the economy is still pretty sluggish.”

The market response was not enthusiastic with the share market index down 0.36 of a per cent and the Australian dollar down slightly to US79.9c.

Reserve Bank Governor Phil Lowe was optimistic in a speech on Tuesday night  saying: ” Encouragingly, growth in the number of Australians with jobs has picked up over recent months, and the unemployment rate has come down a bit.”

“The investment outlook has also brightened. These are positive developments,”  Dr Lowe said.

Dr Lowe’s comments add to a message of improvement expressed last week by Treasurer Scott Morrison.

“The Reserve bank has changed its language [to be more positive] but I think the government and the Treasury are being overly optimistic,” Ms Hutley said.

However, Dr Lowe’s recent calls for workers to raise the pressure on employers to boost wages appear to be having little success. The real unit labour cost index, which measures wages and productivity, stayed negative where it has been since March 2016.

“That means productivity is growing faster than wages which leaves space for workers to push for higher wages but that hasn’t happened,” Ms Hutley said.

What economists see as trend growth in the economy has declined since the global financial crisis and now normal is seen as somewhere between 2.5 and 3 per cent. “The economy is still below trend and it’s a disappointing number,” Mr Koukoulas said.