Pop the champagne! There is a good chance that the US recession ended in June, says Capital Economics. Fully 27 of the 28 leading indicators tracked by the research outfit are above trough levels, with hours worked and exports the latest to improve. True, the signposts pointing most prominently to recovery – the ISM survey of sentiment and the stock market – are confidence based, suggesting a circularity to the sense of optimism. But it seems safe to assume that the worst has passed. Drink your bubbly quickly though, because contemplating the nature of the recovery may spoil the mood.

The problem is consumption. Warehouse shelves eventually get so bare that the need to replenish them causes a bounce in economic activity. Such inventory rebuilding has contributed a third of economic growth in the 12 months after previous US postwar recessions ended, calculates Deutsche Bank. But more important was the resurgence in consumer spending, which accounted for half of post-slump growth, on average.

Yet household indebtedness now stands at 128 per cent of national output. In every recession prior to 1990 it was less than half that level, and even in 2001 it was a fifth lower. With jobs still being cut, wages falling and households furiously adding to savings, it is hard to imagine what will prompt a return to free spending days for the American consumer.

Indeed, July retail sales figures, due on Thursday, may only make it into positive territory thanks to the $3bn cash-for-clunkers scheme stimulating car sales. Excluding petrol and autos, “core” sales have been negative since March. While much smaller than Germany's $7bn programme that has weighed on other areas of discretionary spending, the risk remains that car buyers cut back elsewhere. This rebound may come with little fizz.