Joe Hockey is cautiously optimistic the unemployment rate will not hit the heights predicted in the budget.
The treasurer says the latest national accounts show the resilience of the economy, with growth at its strongest in about two years.
The economy expanded at 1.1 per cent in the first three months of 2014, lifting the annual rate to 3.5 per cent and above its long-term trend of 3.25 per cent.
Mr Hockey said the figures backed up the government's economic strategy.
"We have a very solid foundation for future growth," Mr Hockey told reporters in Canberra on Wednesday.
"But as I've said on many occasions, future growth must be earned."
Mr Hockey's budget in May forecast a jobless rate of 6.25 per cent in the coming two years, a figure he says he inherited from Labor.
"I'm cautiously optimistic that we won't get there," the treasurer said.
The unemployment rate sits at 5.8 per cent.
Commonwealth Bank of Australia senior economist Michael Workman does not expect the strong growth reading to prompt the Reserve Bank to lift the cash rate any time soon.
"In our view, there is unlikely to be a policy change until we see a clear shift to lower unemployment rates," Mr Workman said, adding that would need to coincide with higher inflation in coming quarters.
Exports were the biggest contributor to growth in the March quarter, adding 1.4 percentage points.
This coincided with the extraordinary event that Western Australia was not hit by cyclones in the March quarter.
"Our miners are exporting their socks off," Mr Hockey said.
However, Treasury secretary Martin Parkinson is sticking with his budget forecast for economic growth to return to below trend for a while yet.
"That growth (in exports) won't be sustained," Dr Parkinson told a Senate estimates hearing on Wednesday.
Shadow treasurer Chris Bowen said the national accounts highlighted the importance of the mining industry but economic policy must also focus on supporting growth in non-mining sectors.
"The budget has clearly hit household budgets and consumer confidence," Mr Bowen told AAP.
Mr Hockey dismissed the drop in confidence as not unusual after a budget.
Treasury's executive director for the macroeconomic group, David Gruen, went further, saying confidence readings were not particularly helpful in predicting consumption.
"It is something of interest, it certainly generates headlines in newspapers," Dr Gruen told the hearing.
"I'm not going to say it is of no value, but I am going to say that it contains relatively little information once you know what else is going on in the economy."
Provided the economy continued to do reasonably well, with good jobs growth, consumer confidence was likely to bounce back, he said.
Share
