The Reuters/University of Michigan consumer sentiment index dipped from 75.3 in February to 74.3 in the first of two readings for March in a sign that rising gas prices may now be having in an impact on the mood of the consumer.

Based in large part on a recently improving labor market, the current conditions component remains firm, up from 83.0 to 84.2, however, the expectations component more than offset that gain, down from 70.3 to 68.0.

It’s a good think that equity markets don’t have a gas tank to fill every week or they too might think about pulling back but, so far, they show little sign of doing so, though that could soon change given that inflation expectations show signs of stirring to life.

Survey respondents ratcheted up their one-year outlook on consumer prices from an increase of 3.3 percent to 4.0 percent in a delayed reaction to rising pump prices that the Energy Department said gained another 4 cents over the last week, rising to a national average of $3.83 per gallon.

Five-year inflation expectations (the measure watched more closely by Fed economists) rose just one-tenth to 3.0 percent, indicating that, like Fed Chief Ben Bernanke, most Americans see rising gas prices as being temporary, a belief that, unlike Bernanke’s, could prove to be temporary itself.

Every time I read a story like this one today in which “leading economists” talk about the importance of the American consumer in powering economic growth or when talking heads on TV casually note that consumption accounts for 70 percent of all economic activity here in the U.S., I think back to this data series:

I don’t know what would make anyone think that the 70 percent figure is anything but worrisome, especially with government spending accounting for another 20 percent or more. That leaves the combination of domestic investment and net exports contributing less than 10 percent (net exports being negative for quite some time), yet, economists and news anchors repeat this “consumers account for 70 percent of the economy” over and over as if it were some kind of economic law which it is certainly not.

Future historians will no doubt look back someday while scratching their heads and say, “I don’t know why on earth they would have thought that was sustainable”.

The final February data on consumer confidence is now in over at Gallup and they report that, after the American mood darkened slightly a few weeks ago, economic confidence ended with its sixth straight monthly gain as depicted below.

What’s interesting about the graphic (as well as with other similar surveys) is that we’ve been here before but have never been able to move higher.

In a separate, less frequently conducted survey at Gallup, the percentage of Americans who think the U.S. economy is growing has reached a new recovery high at 40 percent. While this is good news, it’s worth pointing out that some 46 percent of those polled say the economy is still either in recession or depression.