Australian retail sales topped forecasts for a fifth straight month in December adding to evidence that consumer spending is reviving in time to help cushion the economy from a cooling mining boom. The data from the Australian Bureau of Statistics also showed the country boasted its biggest trade surplus in two years in December as exports rose beyond all expectations. Despite all the talk of a Chinese slowdown, exports to the Asian colossus surged 29 percent to a record A$94 billion ($84 billion) for all of 2013. The upbeat news supported the Reserve Bank of Australia's (RBA) decision earlier this week to shut the door on further rate cuts and lifted the local dollar a third of a U.S. cent to a one-month peak at $0.8980. "For the RBA, it is consistent with their view that policy is gaining further traction," said Su-Lin Ong, a senior economist at RBC Capital Markets. "It sits comfortably with their neutral bias as they wait and see how the combination of a lower exchange rate as well as lower interest rates work its way through the economy." The RBA dropped its easing bias in part because of signs record lows rates of 2.5 percent were feeding through to consumer wealth, confidence and spending. After a marked pick up in the second half of last year retail sales rose 0.5 percent in December, from the previous month to pip forecasts of a 0.4 percent gain. For the whole fourth quarter sales rose an inflation-adjusted 0.9 percent. That was a welcome turnaround as the A$270 billion retail sector accounts for 17 percent of Australia's A$1.5 trillion in annual gross domestic product and is the second-biggest employer after the health industry, with 10 percent of all jobs. Exports to China Run Hot Another major positive for the economy has been a rapid rise in resource exports as mining projects come on stream and demand from China remains resilient. Trade figures for December showed total exports climbed 3.7 percent in the month to an all-time high as volumes of farm goods, iron ore and coal all increased. That delivered a trade surplus of A$468 million, a marked improvement from the A$300 million deficit analysts had expected. The country also enjoyed a small surplus for the whole of the fourth quarter -- a swing of almost A$3 billion from the previous quarter -- which likely made a major contribution to economic growth. Exports of goods to China jumped 11 percent in December to a fresh record peak, thanks in large part to a sustained acceleration in iron ore sales.  That trend continued into the new year with shipments of iron ore from Port Hedland, Australia's busiest port, up 27 percent in January from a year earlier despite weather troubles. Exports of liquefied natural gas have also been rising strongly and are set to explode over the next few years as major projects come on line. "A sharp rise in resource export volumes and a marked reduction in resource-related capital goods imports as the mining construction boom winds down will drive the move into trade surplus," said Michael Blythe, chief economist a Commonwealth Bank of Australia. "We may be generating small current account surpluses within five years." If correct that would be a radical sea change for Australia which has run a current account deficit for 128 of the past 150 years. The lessened reliance on foreign funding would in turn tend to underpin the Australian dollar. "The combination of a AAA rating and a current account surplus would likely see the AUD again trade well above parity to the US dollar," added Blythe. (Reuters)