October retail sales fell less than Wall Street feared, reiterating that the American consumer remains in better shape than many economists have projected.

The 0.1% drop marked the first headline monthly decline in sales since March. Economists surveyed by Bloomberg had expected a 0.3% decline.

Sales excluding auto and gas increased 0.1%, below estimates for a 0.2% increase compiled by Bloomberg. Meanwhile, September's sales were revised up to 0.9% from a previously reported 0.7% increase.

"The consumer spent money like there was no tomorrow in Q3, and the retail sales data for October suggest that they broadly paused at the outset of Q4," Jefferies US economist Thomas Simons wrote in a research note Wednesday. "In our view, the pace of spending in Q3 is unsustainable.

"While it is somewhat encouraging to see that spending did not fall off a cliff in October, the pause is likely a sign of further weakness to come."

The October report, released by the Commerce Department, offers a snapshot of consumer spending at a time when economic data has begun to paint a picture of an economy that's showing some signs of slowing growth in the labor market while inflation continues to fall.

“Along with the encouraging October CPI report and healthy slowing in employment growth, the pullback in consumer spending after the summer spending spree will give the Federal Reserve comfort that their restrictive monetary policy stance is reducing inflationary pressures," Nationwide chief economist Kathy Bostjancic wrote in a research note after the data release. "We continue to believe the Fed is done hiking rates this cycle."

Read more: What the Fed rate-hike pause means for bank accounts, CDs, loans, and credit cards

Seven of the 13 categories highlighted in the release saw declines from a month ago while clothing was the lone category unchanged from August. Sales at furniture and home stores declined the most, falling by 2% in October while miscellaneous stores dropped 1.7% from the month prior. Motor vehicle and parts dealers also saw sales declines of 1%.

The biggest gainers were health and personal care stores where sales gained 1.1%. Electronics & appliance stores saw a gain of 0.6%.

The report comes amid a busy week in retail as big box retailers report quarterly results. Thus far, both Home Depot (HD) and Target (TGT) have reported sales declines from the prior year, though their numbers haven't dropped as far as Wall Street feared.

"Q4 is off to a much slower start, and we are not optimistic about the next two months given the resumption of student loan payments in October, and the lack of experiential spending opportunities in the Winter as compared with the late Summer," Simons said of the outlook for consumer spending to end the year.

Josh Schafer is a reporter for Yahoo Finance.

Click here for the latest stock market news and in-depth analysis, including events that move stocks

Read the latest financial and business news from Yahoo Finance