US retail sales dropped more than anticipated in January, a sign of economic slowdown, but not necessarily a sign of oncoming recession.

January retail sales declined a seasonally adjusted 0.8 percent according to a Census Bureau report on Thursday, lower than the average estimate of a 0.2 percent drop from economists surveyed by Bloomberg. In December, retail sales rose by 0.4 percent, buoyed by the holiday shopping season.

The report is a sign that the economy is beginning to slow down as people pull back on spending amid continued inflation. However, economists said that the sudden decline does not necessarily signal that the economy is heading in a more fraught direction.

The report comes amid a larger-than-anticipated increase in the Consumer Price Index in January, a 3.1 percent gain from last year, according to a Tuesday report from the Bureau of Labor Statistics. Taken together, the reports suggest consumers could be cutting back on spending as their purchasing power decreased.

Long term numbers seemed more positive, with consumers continuing to purchase more in key categories than they did around the same time last year. The retail sales report also showed a 6.4 percent yearly increase in non-store retail, which is mostly online sales, as well as 6.3 percent increase in food service and drinking places since last year. 

Still, there may be reasons to be skeptical of these numbers. For example, Peter Morici, economist and former Professor Emeritus at the University of Maryland, said the gain in food service and drinking places likely comes from rising prices rather than people eating out more.

Morici said that reduced disposable income due to non-retail factors such as the rising cost of home repairs is one factor in the unexpected decline.

Shoppers have also been opting for less expensive options, such as generic store brand items, in order to cut retail costs.

“You read about people trading down, from Kraft to store brand macaroni and cheese,” Morici said. “People got more prudent than I expected.”

While the retail sales report might stoke fears about an unhealthy economy, Morici said that it is still too early to tell, and that the sudden drop could end up being an isolated incident.

“If you take a patient’s blood pressure three times a day, every so often it’s too high, no matter how good of a shape they’re in,” Morici said. 

Overall, consumer spending still shows signs of strength. Despite the drop from the previous month, January sales showed a 0.6 percent gain from the previous year. Last month was also marked by an increase in consumer confidence.

The strong job market could also allow consumers to keep spending. Unemployment rates also remained at 3.7 percent as employers added 353,000 jobs in January, according to the Bureau of Labor Statistics.

Jason M. Schenker, President and Chief Economist of Prestige Economics, pointed to the jobs and consumer confidence reports as evidence that the US economy is still in good shape.

“If we’re trying to figure out what the biggest drives are going to be for the economy, it’s going to be jobs,” Schenker said. “As long as the jobs piece remains on solid footing, the outlook for the economy is going to be pretty solid, despite high interest rates.”