US retail sales were up in June but there was little cause for celebration. From Bloomberg:
Surging gasoline costs spurred gains in U.S. retail sales and wholesale prices in June, while a drop in spending outside of auto dealers and service stations reinforced concern an economic recovery will be limited.
Sales at retailers rose 0.6 percent from May, more than forecast and the biggest gain since January, Commerce Department figures showed today in Washington. Excluding autos and gas, purchases dropped for a fourth consecutive month. The Labor Department’s producer-price index gained 1.8 percent, twice as much as anticipated...
A separate government report today showed companies cut stocks of unsold goods for a ninth straight month in May. Business inventories dropped 1 percent, more than forecast, after a 1.3 percent decline in April, Commerce Department figures showed.
Nevertheless, Richard Berner thinks that there will be a bounce in spending ahead.
... [W]e think renewed retrenchment is highly unlikely; in fact, we see a short-term bounce in spending ahead, courtesy of ‘cash-for-clunkers' vehicle purchase incentives... And a recovering economy should promote a modest acceleration in spending next year.
But the spending acceleration in 2010 and beyond is likely to be mild, as we believe that a sea change in consumer behavior is underway, one involving a slow return to thrift. Aggressive deleveraging of household balance sheets and a slow stabilization of household wealth over the next few years mean that spending should grow more slowly than income. As a result, the personal saving rate seems likely to rise to 7-10% during this period...