U.S. retail spending and manufacturing slowed at the end of 2021 as the Covid-19 Omicron variant and inflation surged, early signs the latest complications from the pandemic could be weighing on the economy.

Sales at retail stores, online and restaurants dropped by 1.9%, damping the end of the holiday shopping season, the Commerce Department said on Friday. December’s sharp decline followed record-level retail sales that started with a 1.8% gain in October from the prior month.

Sales were up considerably over the past year, however. Retail sales grew 16.9% in December when compared with the same month a year ago, marking a resurgent period for consumer spending after a fuller reopening of the economy as vaccinations spread and government stimulus that left households flush with savings.

The Federal Reserve separately said U.S. industrial production fell for the first time since September. Manufacturing output, a key component of the reading, dropped 0.3% as supply-chain issues continue to affect output.

U.S. stocks had a mixed showing after the release of the weaker-than-expected economic figures and bank earnings reports showing smaller profits, with the Dow Jones Industrial Average falling and the S&P 500 and Nasdaq showing slight gains.

Many holiday shoppers heeded warnings about shipping delays, pushing a large share of the season’s usual gains earlier in the year. Sales were down broadly across spending categories in December, with online sales dropping sharply by 8.7%.

Electronics stores declined by 2.9% over the previous month in December, while furniture and home stores dropped by 5.5%. Restaurant and bar sales dropped by 0.8%.

For now, consumers’ opinions of the economy are worsening. The University of Michigan’s consumer sentiment survey showed a drop on Friday, and expectations for inflation over the next five years rose to 3.1%, up from the 2.9% increase reported in December.

Economists say effects of the pandemic—which is nearing two years—such as limited supplies and the wave in inflation is causing Americans to pause purchasing.

Retail sales are adjusted for seasonal variations, but aren’t adjusted for inflation, so the increases of the past year are damped by historically high inflation. The consumer-price index, a primary measurement of inflation, rose to 7% in December from a year ago, the highest level since 1982.