The Australian economy is booming and if it hadn’t been for the looming crisis in Europe, there wouldn’t have been interest rate cuts last month and this month from the Reserve Bank.

Third-quarter national accounts data from the Australian Bureau of Statistics, released this morning, showed the economy grew 1% from the June quarter, which in turn saw a significant upgrading of its growth rate to 1.4% from the previous 1.2%. The economy grew 2.5% from the September quarter of 2010, but looked at another way, the economy is now growing at an annual rate of 5% or more, seasonally adjusted. In Australian historical terms, it is a boom. And it’s definitely a boom in WA, where annualised growth is more than 16%, and Queensland, where it’s more than 9%.

The growth for the quarter was driven by a 1.5% contribution to growth from capital expenditure on non-dwelling construction, a 0.4% contribution from final consumption expenditure, and 0.4% contribution from capital expenditure on machinery and equipment. The increases were partially offset by a -0.8 percentage points contribution from changes in inventories, and -0.6% contribution from net exports. And we are swimming in income with the ABS saying this morning that in the September quarter, seasonally adjusted real net national disposable income increased 1.9%. Growth over the past four quarters was 6.0% compared with 2.5% for GDP,” the ABS said.

That is further evidence of the boom and while much of that income is going to mining companies and foreign shareholders, more is staying here in Australia.

Without the eurozone woes, which have seen the RBA cut rates by 0.25 last month and yesterday, we would be facing speculation today of a rate rise, tempered only by the recent weakening in inflationary pressures.

Our strong growth rate compares to Brazil, which reported this week that growth was flat in the third quarter, Germany and France, where growth rose 0.5% and 0.4% from the June quarter respectively, and the eurozone as a whole, which grew by just 0.3% in the three months (With Spain flat, Greece and Portugal in deep recession and Italy still working on its figures). Growth in the US was 0.5% quarter on quarter and 2% annual, so we are still doing a lot better than other developed economies.

The figures make a mockery of the gloomsters and doomsters in retailing, the media and among business economists, and they also tell us that surveys showing weak consumer and business confidence levels are not backed by reality.

Car buyers, consumers and miners are all going strong. Manufacturing, which we are continually told is at death’s door, was also strong (remember the data on rising manufacturing investment we highlighted last week, not falling, as some alarmists would have us believe). Manufacturing grew 1.3% in the quarter and contributed 0.2% to overall growth. “The main contributors to growth in household final consumption were purchase of vehicles (0.2 percentage points), recreation and culture (0.2 percentage points) and hotels, cafes and restaurants (0.2 percentage points),” the ABS said, meaning consumption was very solid in the quarter.

Their contributions helped offset the expected negative contributions from a fall in inventories (a rather large 0.8% from GDP), net exports (a negative 0.6%). Household final consumption expenditure increased 1.2% and government final consumption expenditure fell 1.2% in seasonally adjusted terms (that will be repeated in the next few quarters as government spending cuts bite).

The ABS said non-farm GDP increased by 1.1% in the September quarter. The terms of trade rose 2.7% and real gross domestic income rose 1.6% and the savings rate remained at a very high 10.1%. Other than manufacturing, the industries that drove growth in the September quarter were construction with 0.4% contribution to growth, and mining with 0.3% contribution to growth. And on the back of this GDP growth and a 2.7% increase in the terms of trade, real gross domestic income grew 1.6% in seasonally adjusted terms for the quarter.

The data also provide some context for the MYEFO last week and the associated spending cuts. With an economy this robust, Wayne Swan is right to keep aiming for surplus, despite the whingeing from business economists and the gloomsters in retail. But in shifting spending forward into the next seven months from 2012-13, there’s also the risk the government will be pumping more income into the economy than justified by the robust growth we’re enjoying.

Then again, if — or when — the eurozone fully unravels over the northern winter, it might prove timely.

The GDP data also tells us that so long as Europe muddles along and investors don’t lose confidence, then there may not be any more rate cuts in Australia. The economy is just too strong, but don’t tell the commentariat that, they won’t believe you.