The nation's gross domestic product grew at 1.8 per cent over the year to June, the Australian Bureau of Statistics reported in quarterly national accounts released on Wednesday.
That was above the expectations of economists and the Reserve Bank of Australia, which forecast the economy to grow by 1.6 per cent on an annual basis.
Analysts didn't foresee such a large jump in consumer spending following a subdued start to the year.
Household consumption rose 0.9 per cent over the three months to June.
The previous quarter was impacted by weather events, ABS head of national accounts Tom Lay said.
"End of financial year sales and new product releases contributed to rises in discretionary spending on goods including furnishings and household equipment, motor vehicles and recreation and culture goods," Mr Lay said.
"Households took advantage of the proximity of Easter to ANZAC day to extend their holiday break, resulting in rises in discretionary services such as hotels, cafes and restaurants and recreation and culture services."
By contrast, the public sector - which had previously been propping up the economy - was notably weaker, with public investment the biggest detractor from growth, down 3.9 per cent.Â
The result was strong evidence of a private sector recovery, ANZ senior economist Adelaide Timbrell said.
"Although the data is lagged, we expect the RBA will view the GDP release as a sign that consumers are recovering, which may add caution around rate cut decisions in the near term," she said.
The quarterly economic pulse check comes after the RBA cut interest rates for a third time this year in August, which is expected to boost growth as borrowers gain greater buying power.
Monthly inflation spiked unexpectedly in July, although the Reserve Bank takes its guidance from less volatile quarterly figures, which are expected to show price growth remaining subdued when next updated in late October.
But combined with Wednesday's GDP figures, they indicate the economy is running hotter than thought, reducing the urgency for the RBA to lower rates.
The annual economic growth rate climbed from an upwardly-revised 1.4 per cent recorded in March.
Treasurer Jim Chalmers said Australia's economy was gathering momentum.
"This is the private sector recovery that we were planning for, preparing for and hoping for," he told reporters as he used a Powerpoint presentation to highlight the transition from public- to private sector-led growth.
On a quarterly basis, the nation's economy grew by 0.6 per cent.
Australia avoided dropping back into a per capita recession.
GDP growth per capita was up 0.2 per cent per person, after a drop of 0.2 per cent on a per capita basis the previous quarter.
It's only the second quarter out of the past 10 that each Australian has seen an increase in their share of GDP - a crude measure of household living standards, because it accounts for growth in the size of the population.
Net disposable income per person grew at 0.4 per cent over the year, boosting consumption, with the household saving ratio falling from 5.2 per cent to 4.2 per cent.
