The Australian economy expanded by a less-than-expected 0.3 per cent through the September quarter, prompting doubts over how the new year will play out.

The Australian Bureau of Statistics reported this morning that annual growth has slipped back to 2.8 per cent.

The overall results were held up by net exports, which added 0.3 percentage points to the result, and public spending on capital works.

Household spending rose by 0.3 per cent but over the past year it has slipped to an annual rate of 2.5 per cent.

Households lifted spending on food, financial services and transport services. But they cut spending on cars, household equipment, clothing and footwear.

The broadest measure of income, net national disposable income, increased by just 0.1 per cent.

However, compensation of employees improved by a full percentage point. Despite that lift, annual growth in compensation slipped.

In a sign of the pressure facing households, the savings ratio fell to its lowest level since the advent of the global financial crisis.

“Weak growth in gross disposable income was due to moderate growth in compensation of employees being partially offset by a fall in gross mixed income and a rise in household income tax payable,” the bureau said.

In positive news for WA, State final demand lifted by 0.4 per cent, largely on the back of a lift in private capital expenditure.

The figures came as the ASX200 felt the shockwaves out of the US and concerns about an American-China trade war.

By 10.50am, the S&P ASX200 was down 1.2 per cent to 5643.6. That follows a one per cent loss on Tuesday.