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Don't look now, but Bloomberg is talking to economists who say that $4.00 per gallon of gas is not out of the question.

Core CPI showed just a 0.1% increase last month.  This is less than forecasted and is normally a precursor to falling mortgage rates. 

If we add back in the costs of energy and food to the CPI figure, though, the number jumps to a 0.6% increase.  This is the largest increase since last April when hurricane fears fueled gas price surges.

Author's Note: Sorry for the pun on "fueled" and "gas prices".

Despite increasing gasoline costs, however, Retail Sales continued to surge higher.  Excluding gas sales, sales growth registered 0.4% in March for an annual increase of 3.8%.

As a home owner, the co-existence of rising gas prices and sales receipts is rather interesting and revealing.  Even though Americans have fewer discretionary dollars each month, they are spending more of them.

Rising gas prices is a drag on the economy and that normally pulls mortgage rates down.  Rising retail sales is a boost to the economy and that normally pushes mortgage rates up. 

It's unclear whether gas prices will beat down the American consumer and win this Tug-O-War, but the story has started making headlines and entering the public consciousness.

The more that happens, the better it is for mortgage rate shoppers.  It pushes the see-saw in favor of wallet-watching which restricts the amount of dollars entered into the economy.

Dan Green is an active loan officer. Email or call 513-443-2020. Dan is on Twitter at @mortgagereports.