There’s finally compelling evidence that a non-resource sector could help buoy the Australian economy. This week, the Australian Bureau of Statistics (ABS) reported that retail sales rose 0.7 percent, on a seasonally adjusted basis, to AUD22.5 billion. That trounced the consensus forecast, based on Bloomberg’s survey of economists, by a substantial three-tenths of a percentage point.

More important, the longer-term trend shows promise, as there hasn’t been a decline since April, while on an unadjusted basis, sales growth has been positive for 12 consecutive months. November’s figure also marked the fourth straight month in which sales have beaten economists’ expectations, according to RBC Capital Markets. Meanwhile, Deutsche Bank noted that sales were up 4.4 percent year over year, which is not only well above the average growth of 2.5 percent over the past year, but the strongest growth in more than a year.

This performance extended across most of the retail space’s subsectors, including restaurants, clothing and household goods. Even the weak result from department stores, for which sales declined 2 percent sequentially, was not so bad when examined on a year-over-year basis, during which growth fell by 1.4 percent versus an average monthly decline of 2.5 percent over the past 12 months.

Since May, which is when the current streak began, retail sales have averaged 0.4 percent sequentially, which is one-tenth of a percentage point better than the trailing three-year average. So it’s not quite time to celebrate, though rosier consumer sentiment appears to be translating into actual consumption, which, of course, begets rosier sentiment among retailers. Indeed, a recent survey of retailers by broker CIMB found that despite flat to slightly negative gross margins, a strong Christmas season has boosted hopes for January and February.

On the other hand, Westpac’s economists characterized the positive sales growth that occurred in prior months as “a shade disappointing,” given the rise in consumer sentiment amid a period of historically low interest rates. Although Westpac was heartened by the latest numbers, it noted that consumer sentiment softened in December, perhaps owing to job worries, and that this could mean weaker results in some of the discretionary categories in subsequent months.

From the standpoint of central bank policymaking, the relatively recent strength of these numbers also shows how long it can take for monetary easing to work its way through the financial system and actually stimulate sales. The Reserve Bank of Australia (RBA) initiated its current rate-cutting cycle in late 2011, lowering its benchmark short-term cash rate eight times. The cash rate has stood at 2.5 percent since early August, which is an all-time low. Assuming more favorable data emerge in the months ahead, then that may be sufficient for the RBA to hold rates steady, instead of lowering them even further.

It’s also worth pondering whether a falling Australian dollar has reoriented consumers toward domestic producers and away from importers. If recent numbers aren’t yet the result of a lower exchange rate, then it could be a factor soon enough, as a falling local currency should make domestic goods more competitive with the rising price of imports. The aussie currently trades near USD0.90, down about 15.1 percent from its trailing-year high.

Overall, it’s certainly reassuring to see strength among retailers, particularly as the resource boom wanes. While we’ve pointed to the housing sector as one obvious source of strength for the economy, there are already widespread concerns that it’s in bubble mode, so we’d prefer to see other sectors of the economy come to fore.