The improved annual growth figure was assisted by the negative September quarter data from a year ago dropping out, and it takes Australia close to what would be considered average levels of economic expansion.
Senior government officials hailed the result as an investment-driven growth story that places Australia among the fastest-growing developed economies in the world, but analysts focused on the weakest household consumption figures since the global financial crisis.
The Australian dollar dropped sharply on the result, from 76.13 USA cents before the 11.30am release to 75.84 United States cents two minutes later.
The growth is worse than market expectations for the economy to grow by 0.7 per cent in the quarter and 3.0 per cent over the 12 months to September 2017.
The figures highlighted the two-track nature of Australia's recent economic growth.
New engineering construction increased 6.3 percent, while household final consumption expenditure gained 0.1 percent for the quarter.
The ABS' chief economist Bruce Hockman said the quarterly expansion was driven by increased activity in both private business investment and public infrastructure, which "underpinned broad growth across the industries". It was the best performance for WA since the June quarter of 2014.
Israel Strikes Syrian Military Site Near Damascus
Jamraya contains a military research facility, which was hit by what was believed to have been an Israeli attack in 2013. Several Arab media reports last weekend suggested that the strike purportedly killed 12 Iranian military personnel.
Economists said they did not expect a near-term rise in interest rates until a pick-up in wages and inflation, which at 1.8 percent is below the Reserve Bank's target band of 2.0-3.0 percent.
So far this year, Australia had experienced the strongest jobs growth in 40 years, with four out of five jobs being full-time, he said.
The main driver of economic growth had been public and private investment.
The statistics bureau said Wednesday that 17 of 20 industries recorded positive growth in the quarter.
"The big concern is whether households, the engine of the economy, accept that expectations of a lift in wages growth are unjustified and it becomes necessary to adjust spending to a lower income outlook", he said.
Meanwhile, spending on electricity, gas and other fuels went up 11.5 per cent and cigarettes and tobacco went up 11.1 per cent. That view looks too optimistic, Mr. Evans said.