Official figures show that US retail sales slumped 1.2% in September as consumers were hit by tight credit and turmoil on financial markets.
The drop in sales was the steepest since August 2005 and was weaker than market expectations for a 0.7% drop. A big factor was weak car sales, which plunged 3.75% in the month.
But even excluding cars, retail sales were down a hefty 0.6% in September, the Commerce Department report showed.
The US economy grew at an estimated 2.8% annual pace in the second quarter but analysts say the figure was skewed by a once-off government stimulus that boosted spending.
Separate figures from the Labor Department showed that US wholesale prices fell 0.4% in September but core inflation - excluding food and energy - rose 0.4%.
The producer price index (PPI) showed its second consecutive monthly decline after a 0.9% drop in August. Wholesale prices, which jumped 1.2% in July when oil hit record peaks above $147 a barrel, have since eased as oil prices have tumbled.
