The Commerce Department reported U.S. retail sales fell 0.1 percent month-over-month in October, the first decline since March.

Economists polled by The Wall Street Journal had forecast a 0.2 percent drop in sales

The decline follows a 0.9 percent month-over-month increase in September and robust gains earlier in the summer. The retail figures, combined with slower hiring and easing inflation, indicate that the economy is cooling after surprisingly strong growth much of this year.

Sales are expected to pick up with holiday spending with several reports predicting gains over the November-December holiday timeframe of approximately 4 percent although they’re expected to trail pandemic-stimulus-boosted gains in recent years.

In a press release, National Retail Federation Chief Economist Jack Kleinhenz noted that U.S. retail sales kept up a long streak of year-over-year gains in October, up 2.5 percent year over year. Sales climbed by 4.1 percent year over year in September.

“Fourth-quarter consumer spending stepped off on a more moderate pace, as expected,” Kleinhenz said. “The staying power of the American consumer has been the story of 2023, but financial conditions have tightened appreciably in recent months, curbing the purchasing power fueled by job and wage gains. Nonetheless, continued consumer resilience is still expected for the holiday season.”

Core retail sales as defined by NRF – excluding automobile dealers, gasoline stations and restaurants – were up 3.1 percent unadjusted year over year on a three-month moving average as of October and up 3.7 percent for the first 10 months of the year. Those numbers are in line with NRF’s expectation that 2023 annual retail sales will grow about 4 percent over 2022.

Sales were expected to cool in October and today’s Census numbers are in line with the new CNBC/NRF Retail Monitor, powered by Affinity Solutions, that was released on Monday. The Retail Monitor reported that core October retail sales were down 0.03 percent seasonally adjusted from September but up 2.63 percent unadjusted year over year. That compared with increases of 0.09 percent month over month and 4.39 percent in September.