A Commerce Department report released Wednesday showed that consumers spent at a slower rate in February than anticipated.

Retail sales in advance rose 0.3% month-over-month, slightly less than the Dow Jones forecast of 0.4%. The sales of autos were down 0.2%. It was well below the expectations for an increase of 0.9% and indicates that consumer are slowing down.

According to Labor Department data, spending was well below prices’ rise of 0.8% last week. Inflation is not included in the retail spending data.

Online shopping was the biggest culprit in February’s sales numbers, down 3.7% from non-store sales.

A bright spot among Wednesday’s numbers is the fact that the January spending figures were revised to reflect an increase in spending of 4.9%. That was a phenomenal pace, even more than the initial 3.8% estimate.

Andrew Hunter, senior U.S. economist, stated that the two-month figures “indicate that real consumption growth continues to be reasonably strong” despite some headwinds, especially from anticipated interest rate rises coming from Capital Economics.

Hunter said that real disposable incomes had already dropped since mid-2021 due to withdrawal of fiscal support and the price surge, so consumption growth is likely to continue to fall in the months to come, especially as personal savings has fallen to a pre-pandemic low. It is possible that Fed tightening will soon begin to impact spending on large-ticket durables.

Consumers are however still flush with cash and have $1.4 trillion of savings at the end of 2021. However, the personal saving rate (currently 6.4%) has been steadily falling during the pandemic.

There has been a tremendous demand for goods and services. However, the rate of growth has not kept up. This has led to inflation at 7.9% per 12-month, which is the highest rate in over 40 years.

Commerce Department stated that retail spending rose 17.6% over the past year.

This is due to the meteoric increase in gas prices. Gas station sales rose 5.3% in February and 36.4% compared with a year earlier. According to Energy Information Administration, prices at the pump increased by 7% only in February.

Strong sales at bars and restaurants also saw strong growth for the month. They were up 2.5%, which is 33% more than last year. There was a 1.8% drop in health and personal care, and a 1% decline for furniture stores. Motor vehicles and parts dealers saw 0.8% growth.