Consumer sentiment is dropping, according to the University of Michigan's Consumer Sentiment Index.  Here are the key survey findings from Reuters:

The preliminary March reading of the University of Michigan's consumer sentiment index for March came in at 68.2, down from 77.5 in February. That was the lowest level since October 2010 and was well off the median forecast of 76.5 among economists polled by Reuters.

The survey's barometer of current economic conditions was at 83.6, down from 86.9 the month before and below a forecast of 86.0. The survey's gauge of consumer expectations tumbled to 58.3 from 71.6, the lowest level since March 2009.

Here's a look at the Consumer Sentiment Index since 1978 (chart from James Hamilton):

At Econbrowser, Hamilton shares some helpful research on the relationship between rising gas prices and consumer attitudes:

We had been getting some good economic news on other fronts lately, which I had been hoping would be enough to offset the hit to consumers' budgets from energy prices. The March numbers so far are just preliminary, and consumer sentiment is a somewhat noisy indicator. But whatever you make of the latest report, it is not good news.

Another question asked in the survey pertains to expectations of inflation. Consumer expectations of inflation for the next year jumped from 3.4% to 4.6%. Again gasoline prices seem to figure more prominently in consumers' expectations than we might have expected, and again we can do a simple mechanical calculation of the direct effect. Gasoline prices have a weight of about 5% in the CPI, so if all other prices were held fixed, the 20% increase in gasoline prices we've seen over the last 3 months would add about one percentage point to the CPI.

Read Consumers see bad news here.