Five months after an election won on the promise of jobs and growth, the national accounts for the three months following the election show the economy went backwards 0.5 per cent, far more than even the bleakest of the professional forecasts.

Economic growth over the year to September was just 1.8 per cent, a big comedown from 3.1 per cent over the year to June, which was itself revised down from 3.3 per cent.

"This is the second-worst economic growth result in 25 years," Labor treasury spokesman Chris Bowen said. "It's only the fourth negative quarter since 1991, and on the only other occasions there were good reasons. In 2011 it was dealing with Cyclone Yasi in Queensland, in 2009 it was the greatest international downturn since the Great Depression, and in 2000 it was the aftermath of the Sydney Olympics. It is also the case that this figure is worse than 2011, worse than 2000, and comparable with 2009, in the middle of the global financial crisis."

Mr Morrison said the unexpected result would be incorporated in the mid-year budget update to be delivered on December 19.

The government itself was responsible for some of the decline in GDP, with a wind-back in its spending accounting for 0.1 percentage points of the 0.5 per cent drop.

Mr Morrison said the December update would continue to show the budget on a path to return to balance by 2021. But it was possible the trajectory would change, so that the government supported the economy by investing more in infrastructure upfront in return for bigger cutbacks later, as recommended by the International Monetary Fund and the Organisation for Economic Co-operation and Development.

A further slide in business investment knocked another 0.4 points off economic growth, and a partly weather-related slide in construction knocked off 0.3 points.

Pothole or abyss?

Financial markets believe the Reserve Bank will "look through" the slide in GDP on the assumption that it is unlikely to continue. The Australian dollar lost just half a US cent on the news, the share market closed higher and implied probability of a rate cut on the futures market changed little, inching up from 11 to 13 per cent.

"The main question is whether the result is just a pothole or the start of something more sinister," Commonwealth Bank chief economist Michael Blythe said.

"We favour the 'pothole' analogy. A number of one-offs were at work: poor weather conditions and numbers are dominated by what was happening during the election period of June/July. It's not surprising that some economic drivers weakened at the time. It should be easier for the economy to grow from here on. The income drag from falling commodity prices has ended and the spending drag from falling mining capital expenditure will soon be complete."

Mr Morrison said some of the apparent cutbacks in government spending were a matter of timing.

"This time around we didn't have the Chinook helicopters in the figures, we didn't have the new drugs on the pharmaceutical benefits scheme and things like that. These things move backwards and forwards."

Some of the slide in business investment was also due to timing.

"The Sydney Barangaroo development is winding up. Other projects are coming on stream. I think that is reason to be optimistic," he said.

The best measure of living standards, real net national disposable income per capita, climbed in the September quarter by 0.5 per cent, to be up 1.7 per cent over the year, reflecting higher commodity prices.

Consumer spending added 0.3 points to the change in gross domestic product.

Asked how he would reconcile an economic downturn with higher incomes if growth were to fall for a second consecutive quarter, sparking talk of a technical recession, Mr Morrison refused to use the word "recession", saying he was "not countenancing the sort of outcomes that you are referring to".

Both the NSW and Victorian economies took a hit from weaker public investment. NSW state final demand barely grew at 0.1 per cent and Victoria's fell 0.4 per cent. Queensland and South Australia also grew by just 0.1 per cent, and Western Australia and Tasmania fell by 3.8 and 0.3 per cent, respectively. The ACT economy contracted 1.3 per cent.

Mr Morrison called on the Labor opposition to work with the government in the same way he said the Coalition worked with the Hawke/Keating government during earlier difficult economic times.

"We haven't had that, and the sort of cynical opportunism we see too often on economic policy from the Labor Party, I don't think to date has prequalified them as a willing partner in the national interest for jobs and growth," he said.