U.S. retail sales rose 1.2% in July, which was more or less in line with expectations. The number does not change economists’ expectations for no rate move this afternoon in the U.S.

Auto sales drove the gain. Excluding autos, the rise was just 0.2%. “Americans couldn’t resist the lure of the shiny new car in July, but elsewhere, the absence of wide-scale clearance signs and a tepid labour market limited consumer enthusiasm,” comments CIBC World Markets.

“After a concerted effort to keep inventories in line, there were fewer of the ‘end-of-season’ discounts normally employed to clear out merchandise this time of year. Moreover, the combination of a U.S. labour market that has yet to regain its footing and ongoing equity market weakness, likely left many consumers in a conservative frame of mind.”

BMO Nesbitt Burns says, “The trend is not bad, not bad at all. Through the first seven months of the year, ex autos spending has registered only one down month. And the June/July performance shows few hints of a marked turn for the worse. Thus, the mystery of why consumer outlays are holding up so well remains intact. Mortgage refinancing has liberated more cash for spending in recent weeks. And job growth, while anemic, is not falling out of bed. Consumer confidence has dipped, but remains far above recession territory despite gigantic wealth losses.”

CIBC says that “there remain hurdles to a resumption of broad-based consumer spending, with fallout from the recent round of equity wealth destruction and the absence of meaningful job gains likely to limit late-year growth prospects.”

“There is no reason to extrapolate second-half declines in consumer spending from these figures. So, on balance, they do not support a Fed easing this afternoon,” says BMO. “The possibility that consumers are nearly tapped out remains real. If this theory evolves into a visible trend, the Fed would respond. But not yet.”