* Oct initial retail sales +1.6% vs +0.3% consensus
* Victoria state leads gains, NSW rises too
* Economists expect sales to be strong through X'mas (Writes through, adds economist comment)
By Swati Pandey
SYDNEY, Nov 20 (Reuters) - Australian retail sales rebounded by 1.6% in October from the month before, as the second-most populous state of Victoria crept out of a long coronavirus-induced lockdown.
The preliminary data on Friday showing a jump in sales follows a decline in September and August, and far exceeded median expectations for a modest 0.3% rise in a Reuters poll.
"The reopening of retail stores in Victoria at the end of October led to a boost," said Ben James, a director at the Australian Bureau of Statistics (ABS).
Victoria, which was in a lockdown for more than 100 days, saw retail sales jump 5.2% from September, while in the most populous New South Wales they climbed 1.6%.
Cafes, restaurants and takeaway food services led the surge in October, while there were also rises in clothing, footwear and personal accessory retailing, the figures showed.
The ABS will release the final estimate on Dec. 4.
Economists said Friday's upbeat data showed nationwide spending would jump in the current quarter, bolstering the broader economic recovery.
"Black Friday sales in November are expected to be even larger this year, and the recent pick-up in consumer confidence also suggests that spending will remain elevated into the X'mas period," Citi economists wrote in a note.
"We believe that low interest rates, and a record savings buffer means that households are expected to smooth consumption over in Q4 and early next year despite total fiscal stimulus to households tapering off."
The Reserve Bank of Australia (RBA) has slashed interest rates to near zero and launched a A$100 billion ($72.9 billion) quantitative easing programme over six months to help keep borrowing costs low. For its part, the government has announced A$300 billion of fiscal stimulus since March.
All that support has lifted business and consumer confidence. data from the ABS showed 24% of businesses reported an increase in revenue in November compared with 16% in October, while the proportion of businesses reporting economic uncertainty as a factor influencing their capital expenditure halved since August to 29%.
($1 = 1.3723 Australian dollars) (Editing by Jacqueline Wong)