U.S. retail sales came in stronger than expected this morning, boosting markets, but all the corporate scandal has apparently taken its toll on consumer confidence.

U. S. retail sales rose 1.1% in June, more than double consensus estimates. Excluding automobiless, retail sales grew 0.4%. Both numbers reversed similar declines in May.

“Despite recent ultra-negative headlines, U.S. consumer spending remains healthy supported by low interest rates, rising incomes and very attractive retail prices,” observes RBC Financial. It notes that sales at auto dealers led the way, with strength also evident in clothing stores and electronics and appliance stores.

“These numbers will not change the impression that second quarter GDP growth slowed and they give only the faintest hint at firming activity into the summer,” cautions BMO Nesbitt Burns. “Judged by the automakers’ near-panic reinstitution of zero-rate financing, and the drop on Wall Street, it’s not clear at all that growth in consumer outlays is headed higher.”

This point is reinforced by the University of Michigan’s preliminary July consumer sentiment numbers, which came in at only 89.5, quite a bit lower than what markets were anticipating. “This drop in confidence is the result of the barrage of accounting scandals in the weeks since the June survey which is making consumers and investors a lot more nervous about near-term prospects,” says RBC. “The retail sales report points to still-healthy consumer spending despite the recent volatility in financial markets and the resulting avalanche of panicky headlines. The sentiment numbers, however, suggest that the steady stream of accounting scandals could be filtering down from Wall Street to Main Street.”