The Commerce Department says growth improved from the 1.3 percent rate in the April-June quarter.
The pickup in growth may help President Barack Obama's message that the economy is improving. Still, growth remains too weak to rapidly boost hiring. And the 1.74 percent rate for 2012 trails last year's 1.8 percent growth, a point GOP nominee Mitt Romney will emphasize.
Growth was held back by the first drop in exports in more than three years and flat business investment in equipment and software.