Excluding motor vehicles, retail sales rose 0.9 percent last month and, excluding both autos and gasoline, sales rose just 0.6 percent.

Surging pump prices more than offset falling demand as gasoline station sales jumped 3.3 percent in February after an increase of 1.9 percent the month prior. Motor vehicle sales rose 1.6 percent last month following a decline of 1.6 percent in January.

Clothing sales rose 1.8 percent, however, here too, rising prices played a significant role in the sales gains as the Labor Department recently reported that, over the last three months, the cost of apparel has been rising at an annual rate of more than 5 percent.

An unusually warm and dry winter has also spurred many purchases at home improvement stores, as sale there rose 1.4 percent for the second month in a row. Recall that the retail sales figures are adjusted for seasonal variations and holidays, but not rising prices, all of which makes the February surge less than what it appears.

Iran is to accept gold instead of dollars as payment for its oil, the country’s state news agency has said.

The move comes as US and European Union sanctions against Iran have made it difficult for buyers to make dollar payments to Iranian banks.

Mahmoud Bahmani, the governor of Iran’s central bank, is reported to have said that the country would accept payment in gold “without any reservation”.
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Iran has the world’s third-largest oil reserves. Crude oil is predominantly traded in US dollars, but Iran already accepts payment in other currencies.

Likely related to this announcement comes word in this WSJ story($) about the U.S. Treasury Department interceding to stop a Dubai based bank from supporting Iranian oil sales by helping the nation evade international sanctions that were put in place to pressure Iran to give up its nuclear weapons program.

According to the report, Noor Islamic Bank, partly owned by the city of Dubai and run by Sheikh Ahmed, the son of Duabai’s ruler, was believed to have handled as much as 60 percent of Iran’s oil sales last year totaling nearly $50 billion.

Those saying jobs were “hard to get” fell from 43.3 percent to 38.7 percent, the lowest since late-2008, as Americans were more confident about their earning potential, 15.4 percent expecting their income to rise versus only 12.7 percent who were pessimistic.

In looking at the relationship between consumer confidence and gasoline prices above, it would appear that there has not yet been enough time for recently surging pump prices to have an impact on consumer outlooks as has happened reliably in the past.

The fact that the winter gas price surge has been so sudden and that miles driven at this time of the year are far less than in the spring and summer would suggest Americans still don’t fully appreciate how much $4 and $5 gas prices are going to hurt.

Energy Department data for retail gasoline prices only goes back to 1990, so, Labor Department data from the Consumer Price Index is used instead, presumably the only difference being that you get the CPI Gasoline index instead of gas prices on the left.

Like the other surveys, recent readings for the Gallup poll are more often associated with recessions than recoveries. We’ll probably find out this spring whether Americans’ dour mood has been justified or if the economic recovery really is as good as it looks.

What the nation’s politicians wouldn’t give to see signs like the one below this summer as the electorate mulls over who’s deserving of public office and who’s not…

Why? That’s pretty simple.

As goes the price of gasoline, so goes the economy.

As goes the economy, so goes the fate of many incumbents.

And, right now, the trajectory of the price at the pump does not bode well for the latter.

The automobile club AAA said the national average price for a gallon of gasoline jumped 3.3 cents just last night to $3.61 and, this morning, the Energy Department will  release their weekly update on gas prices that will indicate a similar move higher from last week’s $3.52 average.

Sometimes it makes you long for those days in late-2008 when gas prices tumbled to $1.62 a gallon. Of course, back then, the downside to low gas prices was that many thought the world was coming to an end…

With the cost of petrol at a record high for this time of the year, more predictions of $4 a gallon gas are being heard and, with prices already over that mark in parts of the country, $5 signs and $100 fill-ups could be the norm in places like California and New York.

That, and more stories like these, will make voters rather grumpy going into November.

Gas price surge: Up 10% this year – CNN/Money
Obama goes on offense over high gasoline prices – Reuters
Price of gasoline could determine Obama’s fate – MarketWatch
Dem leader Pelosi blames Wall Street for spike in gas prices – The Hill
Gasoline Prices Are Not Rising, the Dollar Is Falling – Forbes
Fear of Iran is inflating gas prices – CNN/Money
Goldman Goes Long WTI – Zero Hedge

All the intrigue is there – everything from the impact on a fledgling economic recovery to a blame game that runs the gamut from Wall Street to environmentalists.

Of course, Bill O’Reilly and Lou Dobbs have been looking into this in recent days and provide this explanation – we’re shipping refined products overseas where they can be sold at a higher price and this pushes supply down (and prices up) here in the good ‘ol USA.

[Note: I don't necessarily agree with the O'Reilly/Dobbs view - I'm simply passing it along.]

Some analysts believe the growth in production in North America will continue to exceed market expectations and will swamp the mid-continental region with oil, driving down the benchmark U.S. crude, West Texas intermediate, and forcing Canadian producers to accept steep discounts on WTI prices.
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Combined with lower demand and increased biofuel production, growth in oil output has resulted in a reduction of U.S. imports to 8 million barrels per day at the end of 2011, from 13 million barrels per day in mid-2007. Imports as a percentage of U.S. demand dropped to 45 per cent last year, from 60 per cent in 2005.

In recent report, Citigroup analysts forecast that additional tight oil production could add as much as 3 million barrels per day to U.S. supply by 2020, with the Gulf of Mexico output climbing by another 2 million barrels per day.

In addition to North Dakota’s booming Bakken, more production is expected in Texas’s Eagle Ford and Permian Basin, Colorado’s Niobara, Louisiana’s Mississippi Lime, Ohio’s Utica and the Monterey basin in California, a state that the U.S. Energy Information Administration estimates could hold 15 billion barrels of recoverable reserves, several times greater than the Bakken.

Energy companies are wished good luck in their attempt to begin fracking off the coast of California, though, with the state’s budget situation as it is, maybe it’s not as far fetched as it once was. The Citigroup report went so far as to say that the theory of “peak oil” is now dead, an idea that is more believable when realizing that there are Bakken oil formations in many other parts of the world – not just here in North America.

Signs indicating $2.99 per gallon or below are a common sight around here.

Amazingly, crude oil was recently selling for just $70 a barrel at the Clearbrook, Minnesota distribution point due to the growing production of Bakken shale oil in this part of the country combined with few alternatives for transporting the stuff to other states. The much talked about Brent-to-WTI spread has recently moved back toward $20 a barrel, but the Brent-to-Clearbrook spread now sits at almost $50!

We’re only about an eight hour drive from that area and, as a result, we hear quite a bit of the local news that doesn’t make it to the network news broadcasts including two separate instances of locals being murdered by men attracted to the area and, for whatever reason, choosing an alternative path than driving a truck for an oil company.