(Bloomberg.) The sudden spike in inflation could impact the rapid spending growth that has fuelled the U.S. recovery from the pandemic, at least for the near term.

That’s the conclusion some economists drew from the unexpected slump in consumer sentiment reported Friday, driven primarily by fears about surging prices. An early November drop could indicate a slowing in consumption over the next few months.

“In the near term, shortages and prices should restrain inflation-adjusted spending,” Bloomberg economist Eliza Winger said in a note. “Looking ahead, the risk is outsize, persistent price rises feed into the consumer-inflation psyche.”

The University of Michigan’s sentiment measure dropped this month, trailing all forecasts. The report also showed that household buying conditions deteriorated, with the lowest readings in data since 1978. 

A quarter of respondents to the survey stated that inflation has reduced their quality of life. Inflation is also a major concern for consumers, as they are more concerned about rising home, vehicle, and durable product prices. That’s a notable change from the previous month, when one in five mentioned a deterioration in living standards.

“With views of rising inflation and pessimistic outlooks on finances, it’s of little surprise that buying conditions tumbled in early November,” Wells Fargo (NYSE:) & Co. economists said in a note. “Consumer spending has already begun to transition from goods back to services, but at face value these perceptions are concerning for the outlook.”

In October, research showed that falling consumer expectations could indicate that the economy is experiencing recession, despite rising employment and wages.

As companies try to hire new employees at record rates, wages continue to rise but so is inflation. Average hourly earnings adjusted for inflation were 1.2% lower last October than they were a year prior.

“Businesses have been able to stave off a hit to their profits by passing higher input costs along to consumers,” the Wells Fargo economists said in their note. But they “may soon be met with resistance given the pessimistic move in consumers’ views of their household finances.”

Many American families still have cash left over from the pandemic. Even as pandemic aid has expired and prices are rising, there’s a lot of pent-up demand ahead of the holiday season, especially from higher-income families.

“We would be surprised if this dip in confidence is followed by softening spending, which ultimately is what matters,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, said in a note.

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