* Retail sales jump 1.2 pct in January, more than double
* Trade surplus swells to A$1.4 bln, highest in three years
* Points to strong start for Q1 economic growth
* Data pushes currency higher, market prices out rate cuts
By Wayne Cole
SYDNEY, March 6 Australian retail sales surged
by the most in almost a year in January and exports jumped to
record highs, clear evidence the resource-rich economy is
stepping up a gear even as a boom in mining investment cools.
Thursday's figures from the Australian Bureau of Statistics
were packed with milestones. A 1.2 percent rise in retail sales
blew away forecasts of a 0.5 percent gain, and lifted annual
sales growth to its highest since late 2009 at 6.2 percent.
Likewise the country's A$1.4 billion ($1.26 billion) trade
surplus was the largest in almost three years as exports climbed
3.7 percent and dwarfed analyst estimates of A$400 million.
The reaction was immediate, with the Australian dollar
spiking nearly half a U.S. cent to $0.9024. The futures
market moved to price out almost any chance of another cut
interest rates <0#YIB:>.
"People are choosing to spend more borrow more and save
less, and that's all too the good," said Michael Blythe, chief
economist at Commonwealth Bank of Australia.
"That's a key transmission mechanism of monetary policy and
it shows the stimulus is working," he added. "The next move in
rates is now likely to be up, albeit not until late this year."
The upbeat news strongly supported the Reserve Bank of
Australia's (RBA) decision last month to take another rate cut
off the table and foretell a steady period for policy.
RBA Governor Glenn Stevens will have his own chance to react
to the news when he appears before a parliamentary committee on
Friday, and he'll have to good reason to sound optimistic.
"The jump in sales and exports has got the current quarter
off to a flying start when it comes to economic growth," added
CBA's Blythe. "It's been a very nice run of news."
The revival in retail spending was especially important as
the A$270 billion retail sector accounts for 17 percent of
Australia's A$1.5 trillion in annual gross domestic product
(GDP) and is the second-biggest employer after the health
industry, with 10 percent of all jobs.
The increase in sales in January was broad based, with gains
of 2 percent for eating out, 1.1 percent for clothing and 1.5
percent for households goods. Even long-struggling department
stores saw sales climb 2.6 percent.
Indeed, it was a revival in consumption and a sustained
surge in resource exports that lifted Australia's economic
growth to a stronger-than-expected 2.8 percent in the final
quarter of 2013, the fastest pace in a year.
Exports continued their stellar run in January to hit a
record A$29.8 billion, with farm goods up 5 percent and metal
ores such as iron ore rising 3 percent.
Export growth for the year to January accelerated to 20
percent, the fastest in almost three years, as the hundreds of
billions spent on mining projects turns into actual output.
That in turn will help fill the hole left as mining
investment cools. Net exports added 0.5 percentage points to GDP
last quarter, and no less than 2.4 percentage points for all of
2013, essentially accounting for the bulk of growth that year.
"Clearly this is strong data," said Su-Lin Ong, a senior
economist at RBC Capital Markets. "The export story is good and
has been that way for some time now, whether the local dollar is
going up or down."
"It's got the first quarter off to a great start and will
surely please the RBA."
(Editing by John Mair)