Cramer: The earnings' season most important company

Cramer: The must-see earnings report of the season
Cramer: The must-see earnings report of the season

Jim Cramer has a bold idea on how to measure the pulse of the American consumer: through their coffee orders.

"I have to tell you, I think perhaps the most important quarter of this period is going to be Starbucks," Cramer said Thursday on "Squawk on the Street." "Right now, we've all written the consumer off."

Starbucks reports fourth-quarter earnings after the bell Thursday. Cramer went further to explain why it was such a crucial earnings report. It all comes down to whether U.S. consumers splurge on Starbucks' signature lattes and Frappuccinos, he said.

(Read more: Earnings this week could make for cautious trading)

"Hear me out," Cramer said. "We are a consumer spending society. And I think we've all kind of felt, 'You know what? The consumer is tapped out.' "

(Read more: Cramer: How I find value stocks preparing to pop)

If Starbucks posts strong earnings, Cramer said investors should prepare for a short squeeze of "magnificent proportions" in the retail sector.

We "find out how many people are still buying the triple venti cappuccino with skim for $5 and 3 cents, or whether there's a decline in the United States and the flywheel is not working," Cramer said, referring to the company's business strategy, as cited by Starbucks CEO Howard Schultz.

—By CNBC's Jeff Morganteen. Follow him on Twitter at @jmorganteen and get the latest stories from "Squawk on the Street." Reuters contributed to this report.