On the surface, the U.S. retail sales report scheduled for Wednesday should appear quite solid as consumers are still spending money. However, details are likely to reveal a different story.

Economists generally expect U.S. seasonally adjusted retail sales in March will increase by 1.3% from February, compared with just 0.2% in February, when growth was dragged down by lower gas station sales due to lower bar and restaurant revenues and lower oil prices. These figures are not adjusted for inflation.

On the surface, this seems to indicate that despite multiple confidence surveys,Consumer optimism is waning amid tariff uncertainty and concerns about economic growth, but demand remains stable.

But if the predictions are accurate, the overall data will exaggerate the real demand.

Most Wall Street economists expect fears about tariffs have led to a sharp early release of demand for automobiles, and the industry is particularly vulnerable to U.S. President Trump’s trade policy.

Troy Ludtka, senior American economist at SMBC Nickel Securities, saidCar sales could soar as much as 11% as car buyers hope to buy before tariffs are implemented. "However, it is expected that this will be short-lived, as car demand is ahead of the implementation of the vehicle tariffs. Therefore, car sales may be weak in the coming months," he said in a note.

Ludtka's forecast is actually higher than Wall Street consensus, and he expects overall data to grow by 1.6%, while only 0.3% after excluding auto sales, which is consistent with the market average.

Goldman Sachs predicts that the so-called core data excluding automobiles, gasoline and building materials will grow by 0.5%, "reflecting the continued growth of bank card spending indicators and compensatory consumption for unusually cold weather in January and February."

As the economic data schedule this week is relatively light, unexpected data in any direction may trigger market volatility.

"This report will provide more clues to whether bad consumer confidence trends have been transmitted to hard data, as the two have largely run counter to the post-COVID era," said Jose Torres, senior economist at Interactive Brokers.

Torres expects thatRetail sales and industrial production data “may dominate the market narrative on Wednesday.”