Screen Shot 2016-04-13 at 12.05.23 AM

The United States Census Bureau releases its monthly snapshot on retail sales for March Wednesday. Economists polled by Bloomberg expect a 0.1 percent increase in retail sales overall, and anticipate a more substantial increase when automobile sales are excluded. Here are five things to watch in the report.

  1. How do auto sales impact the report?

Auto sales saw a slowdown in March, dropping to a seasonally adjusted selling rate of 16.6 million from 17.5 million in February. Economists expect this decline to drag down the retail sales headline number, when the report comes out tomorrow morning. Wells Fargo economists are calling for a 0.1 percent increase on headline retail sales, and a greater 0.4 percent increase when autos are excluded. “That’s going to be one of the factors really weighing on the headline number,” said Michael A. Brown, a Wells Fargo economist.

  1. Gasoline prices play a role

Gasoline prices rose nationwide in March, and although the increase was only slight, it could mitigate auto sales’ constraint on the headline number. The national average price per gallon was $2.06 last month, an increase of 33 cents from February. Economists expect strong gasoline station sales to compensate for losses in the auto sales category.

The price of gasoline could affect other areas of the report as well. Gasoline is sold at non-service station outlets at places like Costco and Walmart. “There’s lots of talk lately about gasoline being sold at non-service stations so you might see some of the price affecting other areas of the retail sales report as well,” said Michael Moran, Chief Economist, Daiwa Capital Markets.

  1. Are people going out to eat?

Eating and drinking establishments have been a consistent contributor to overall retail sales data, and are expected to remain strong.

One caveat: higher gas prices could eat into cash reserved for eating out at restaurants. Consumers tend to use their savings on gasoline prices on going out to eat, and less money in savings could mean less eating out.

Gas prices are still much lower than they were a few months ago though, and so growth here is still expected.

“Gasoline prices still are very low so there is some discretionary income that is freed up for the eating and drinking places,” said Brown.

  1. Discretionary Spending

The latest jobs report showed brisk hiring in March. 215,000 nonfarm payrolls were added, according to the Bureau of Labor Statistics. Low unemployment and solid job growth support consumer spending, especially of the discretionary kind.

Retail sales subcategories including clothing and furniture, in addition to eating and drinking establishments, are expected to post strong numbers.

This category could be revealing: discretionary spending relates to purchases that can be postponed if budgets are tight. But based on jobs data, economists are expecting a strong showing in this category.

  1. Revisions, revisions, and more revisions?

 Upward revisions to the January and February retail sales reports could be in Wednesday’s cards. The January report’s revision was substantial: the headline was originally reported to be up 0.2 percent; it was later revised to down 0.4 percent. Overall weakness in January and Februarys’ reports is incongruous with labor market data over the first quarter of the year, which shows that despite sluggish wage growth, more people are working. But that data doesn’t align with consumption patterns.

An upward revision to prior months could allow for better alignment between consumption data and labor market data. It’s something to keep a close eye on; retail sales revisions are very common.