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

Why this week's retail sales data is a huge economic indicator

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.