Upcoming retail sales data could be the true tell for the economy

Monthly retail sales data, set for release Tuesday shortly before the opening bell, will be of particular concern to some strategists following months of retail sales data that's missed economists' expectations.

"They're going to give us a very good indication of just how strong, or weak, the U.S. consumer is. And that's going to give us a much better indication of whether the second half of the year is going to be a big recovery for the U.S. economy, or if we're just going to tread water as we go forward," Boris Schlossberg, managing director of foreign exchange strategy at BK Asset Management, said Monday on CNBC's "Trading Nation."

"One of the great surprises of 2017 has been the anemic U.S. consumer. Despite relatively robust job growth and decent average [hourly] wage growth, the U.S. consumer has chosen to essentially save, rather than spend. And I think that has really messed up most of the economists' models," Schlossberg said.

Economists are expecting month-over-month growth of 0.40 percent for retail sales, according to FactSet estimates; this is a substantial increase from the prior report, which reflected a drop of 0.20 percent.

Schlossberg is specifically watching for the "core" retail sales results, which exclude gasoline and automobile prices. Gasoline prices have been rising, Schlossberg pointed out, which could skew the sales data and give the appearance of stronger numbers.

If the "core" figure is poor, this is going to be a big disappointment for the market. But if the core data show an improvement, "that could be the exact kind of catalyst we need to see the dollar rally and equities resume their rally as we go forward."

The value of the dollar relative to foreign currencies has fallen this year as economic growth has come in more tepid than expected.


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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Sara Eisen

Sara Eisen joined CNBC in December 2013 as a correspondent, focusing on the global consumer. She is co-anchor of the 10AM ET hour of CNBC's "Squawk on the Street" (M-F, 9AM-11AM ET), broadcast from Post 9 at the New York Stock Exchange.

In March 2018, Eisen was named co-anchor of CNBC's "Power Lunch" (M-F, 1PM-3PM ET), which broadcasts from CNBC Global Headquarters in Englewood Cliffs, N.J.

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