The latest GDP figures show the continued poor return households are getting from a strong economy. While company profits soar, real household incomes continue to fall. As a result, we have reduced our savings to keep spending at a level that sees the economy running along stronger than it has for more than five years.

The latest national accounts figures released on Wednesday by the Bureau of Statistics showed that in the June quarter the economy grew by 0.9%, for an annual growth rate over the past 12 months of 3.4% – the strongest since September 2012. Similarly the annual growth of GDP per capita of 1.8% is also the strongest since that time:

That is a very strong result and has the economy growing very much at an above-trend rate.

It is driven mostly off the back of household spending and government consumption. While the level contributed by households is roughly in line with the size of that segment of the economy, the 1.0% pts contributed by government consumption, which is equivalent to around 30% of the annual growth, was an outsized contribution, given it accounts for around 20% of the economy:

 

There was also a pick-up in dwelling construction, giving a second act to the housing boom of the past:

The contribution of household spending came via a solid 3.0% increase in consumption over the past year, which reflects a general increase in such growth over the past four years; however, it remains well below the 3.5% 25-year average growth rate:

Such improvement would generally reflect a strong growth in household income. After all, that is a 3% increase in real terms, so you would think it means incomes are rising solidly. But what the figures reveal is that the increase in spending by households is coming from them reducing the amount they are saving.

In June, households saved just 1.4% of their income in trend terms – the lowest level for a decade – and it marked a record 14th consecutive quarter of the savings ratio falling:

The reason is clear – wages and household incomes are not growing at a level that enables households to keep spending without eating into savings.

The good news is that households are not just spending money on essentials. One of the strongest areas of spending growth was recreation and culture, but it is clearly not because we are feeling flush with money – more that after spending money on essentials we have decided to use our savings to have a bit of a holiday or night out.

A look at the growth of the compensation per employee reveals the issue. While the annual growth of total compensation of 4.9% is as strong as we have seen for over six years, the annual growth of average compensation per employee of 1.7% is woefully low:

Yes, the economy is growing well, but the income is flowing right now towards corporations. In June the share of total factor income going to the compensation of employees fell to 52.2% – among the lowest ever in the past 50 years:

Not surprisingly this has meant a sharp fall in the real cost of labour. The real non-farm unit cost of labour (essentially the amount it cost on average to produce one more “unit” of output) fell to a record low of 94.4 in trend terms:

Employers have absolutely no reason to be complaining about wages at the moment or whining about losing international competitiveness – especially with company profits over the past two years rising by 28%.

Pleasingly there has also been an improvement in labour productivity after a dip in the past 12 months, but there has not been any improvement in real household incomes.

While the average compensation per employee rose 1.7% on the past year, that remains below the increase in inflation of 2.1% – meaning that yet again in real terms average compensation fell and remains below the level it was eight years ago:

This has flown through into household disposable income, which fell again in relation to inflation. This has been the case for two years straight now, and for most of the time since 2015.

It means that real household disposable income is at the same level it was in 2011:

Are the GDP figures good? Certainly growth of 3.4% is excellent. If it continues, it should see unemployment fall, and even the per-capita growth of 1.8% is roughly in line with long-term trend rates.

It is also good to see the housing construction picking up again. But the growth is going to be hard to sustain without the income from strong profit growth flowing through to actual wages growth as opposed to just increased employment.

Households will not be able to keep reducing the amount they save at the levels they have been for the past year. Household spending growth in the long term can only be sustained by real increases in household incomes – and we have not seen that for a very long time now.

• Greg Jericho is a Guardian Australia columnist