Stubborn Inflation Continues Devouring Retail Sales as Consumers Grow Cautious 

People are thinking twice before opening their wallets as inflation continues to run rampant, devouring retail sales in most categories last month and aligning with increases in the Consumer Price Index and causing even the wealthiest Americans to start fearing a recession.

Retail purchases were mostly flat in September after an upwardly revised 0.4% gain in August, with inflation artificially propping up the numbers.

Retail and food services sales for September were $684 billion, virtually unchanged from August. Annually, retail sales growth slowed to a five-month low of 8.2%, according to a report by the Commerce Department on Friday (Oct. 14).

Car dealerships, furniture shops, appliance outlets and sporting goods merchants, as well as stores selling electronics, were among the 13 retail categories that saw a drop in sales last month.

See also: Core Inflation Hits 40-Year High as Consumers Weigh Spending Priorities

Labor Department data showed that the core measure of the Consumer Price Index (CPI) — which strips out food and energy — hit a rate of 6.6% compared to August’s 6.3%, its highest pace since 1982, PYMNTS reported on Thursday (Oct. 13).

Prices at the pumps continued their downward trajectory for the third consecutive month, down 4.6% from August but still up more than 18% from the same time last year.

Electronics and appliance stores saw a fall-off in spending of 0.8% in September while furniture sales fell 0.7%, according to the report.

Read more: Apple, Peloton Winners in Amazon’s Early Holiday Sale

While the report illustrates how consumers are feeling the pinch from inflation, big retailers have had some success trying to capture early holiday sales by offering deep discounts to members and other select customers.

Amazon’s two-day Prime Early Access Sale moved over 100 million products from eCommerce sellers’ storefronts on Oct. 11 and Oct. 12, PYMNTS reported on Friday (Oct. 14).

Related: Mastercard: Experiential Spending on Restaurants, Travel Keeps Rising

People are pausing discretionary spending in many instances, travel spending, however, is seeing gains. The latest Mastercard SpendingPulse report shows that travel-related spending, which is not included in the total retail sales figure, made big year-over-year gains in August, with airline up 56.4% and lodging up 38.1%.

Related: The ‘Wealth Effect’ Takes a Hit as Highest Earners Start Fearing Recession

The current economic landscape has even the wealthiest consumers worried that a recession could be on the way, and are now aligning with less affluent people in taking a more conservative outlook, PYMNTS reported on Thursday (Oct. 13).

“The wealth effect” — an economic theory positing that the more financially secure people feel, the more money they spend in both amount and frequency — is analyzed in by Karen Webster in PYMNTS report “Why Retailers Should Worry About Inflation but Dread the Wealth Effect.”