US retail sales fell in October, though by less than expected, after months of strong gains, pointing to slowing demand that could further strengthen expectations that the Federal Reserve is done hiking interest rates.

Retail sales slipped 0.1 percent last month, the Commerce Department’s Census Bureau said on Wednesday. Data for September was revised higher to show sales increasing 0.9 percent instead of the previously reported 0.7 percent rise. Economists polled by Reuters had forecast retail sales would fall 0.3 percent.

Retail sales are mostly goods and are not adjusted for inflation. The report followed news on Tuesday that consumer prices were unchanged in October for the first time in more than a year. That report, combined with slowing job and wage growth, led economists to conclude that the U.S. central bank’s current hiking cycle is over.

Financial markets are even anticipating a rate cut next May, according to CME Group’s FedWatch Tool. Since March 2022, the Fed has raised its benchmark overnight interest rate by 525 basis points to the current 5.25-5.50 percent range.

The dip in retail sales followed months of big gains, suggesting that some of the drop was payback.

It was also a sign that consumers are feeling the heat from higher interest rates, with most lower-income families relying on credit cards to fund purchases after exhausting excess savings accumulated during the COVID-19 pandemic.

But the Bank of America Institute said in a report that there were no signs yet that the resumption of student loan repayments was negatively impacting spending.

Excluding automobiles, gasoline, building materials and food services, retail sales rose 0.2 percent in October. Data for September was revised up to show these so-called core retail sales rising 0.7 percent instead of by the previously reported 0.6 percent.

Core retail sales correspond most closely with the consumer spending component of GDP. Consumer spending surged in the third quarter, making a significant contribution to the economy’s 4.9 percent annualised growth pace. The economy grew at a 2.1 percent rate in the second quarter.

Learn more:

US Retailers’ Financial Losses Jump as Retail Crime Escalates

Big-box retailers such as Target and Kroger, as well as dollar stores, have sounded caution over increasing inventory theft and organised retail crime that could worsen this year’s headwinds from weakening consumer demand.