Retail Sales (Jun.)

The 0.3% m/m decline in retail sales in June is disappointing but, given the strength of sales in earlier months, it still looks like real consumption increased by a relatively healthy 2.7% annualised over the second quarter as a whole. After the weather-related weakness in the first quarter, however, we would have hoped for an even bigger second-quarter gain. Nevertheless, on balance, we still think that the Fed will raise interest rates in September, particularly now that the Greek crisis appears to have been diffused (at least temporarily).