Implications:   Retail sales were soft again in June, but don't take that as a sign consumer spending is rolling over or the economy as a whole is getting weaker.  Total retail sales slipped 0.2% in June and half of the drop in overall sales was due to lower gas prices. This normal volatility causes retail sales to drop three or four months during a year, even in a growing economy.  "Core" sales, which exclude autos, building materials, and gas, were also down 0.2%.  In spite of the weak month, for the second quarter as a whole, core sales were up at a healthy 3% annual rate versus the first quarter, consistent with our forecast that "real" (inflation-adjusted) consumer spending on goods and services combined, rose at about a 3% annual rate as well.  This is not a sign of a dying consumer.  Even with the 0.2% decline in total retail sales in June, they're still up 2.8% from a year ago, which is outstripping the 1.6% increase in the consumer price index.  Note that one area of continuing strength is among non-brick and mortar retailers, where sales rose 0.4% in June, are up 9.2% from a year ago, and now make up 10.9% of sales, the largest portion on record.  Expect a rebound in retail sales in the months ahead.  The fundamental trends that drive growth in consumer spending continue to look good.  These include healthy job growth, wage growth, and very low consumer financial obligations relative to historical norms. Although household debt is at a record high, household debts are the lowest relative to household assets since the peak of the internet boom almost 20 year ago.  In other news this morning, business inventories increased 0.3% in May.  Plugging this into our forecast, suggests real GDP grew at a 2.5% annual rate in the second quarter, a little faster than the 2.1% average since the economic recovery started in mid-2009.  

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