Retail sales rose 0.7% in July, well above expectations, and showing a strong start to the important back-to-school shopping season, the Census Bureau reported today.

July was the fourth consecutive month of higher retail sales, month-over-month, once again showing the resilience of the American consumer.

On an annual basis, sales were up 3.2% over July, 2022.

The July numbers are good news for retailers, who have been banking on strong back-to-school spending in July and August.

Economists have been warning since the beginning of the year that a significant spending slowdown was coming. Now most are saying that while the slowdown is arriving later - and far less dramatically - a slowdown in the pace of spending is inevitable. But thus far, there haven’t been many indications of that.

Today’s retail sales news follows last week’s CPI report showing continued easing of inflation, with prices up 0.2% in July.

The retail sales jump in July exceeded the rate of inflation, and showed that Americans are still spending robustly, ringing up $696.4 billion in sales.

Non-store and online retailers were up 10.3% from the previous year, and food service and drinking extablishments were up 11.9% from July, 2022.

The National Retail Federation, which has forecast record levels of back-to-school and back-to-college spending this year, has been warning that the pace of spending is likely to slow.

While the economy, and consumer spending, “was clearly more resilient in the first half of the this year than many expected,” the pace of sales growth “is becoming incrementally slower,” said Jack Kleinhenz, chief economist of the National Retail Federation, commenting last week on the NRF’s monthly economic report.

“Consumers are still spending but are under financial pressure and have been adjusting how much they buy while also shifting from goods to services,” Kleinhenz said.

“While job and wage gains have counterbalanced inflation, the stockpile of savings accumulated during the pandemic is dwindling and is no longer providing as much spending power as was previously available,” he said.

Nikki Baird, vice-president of strategy at Aptos APT , a retail technology company, reacted to the CPI news last week by noting consumers still face pressures that could hurt retail results during the rest of year, “With over $1 trillion in credit card debt, and student loan payments resuming, there are a lot of other pressures on consumer spending looming, Baird said.

That means, Baird said, that “consumer-facing companies will need to have a carefully considered promotional strategy for Holiday 2023. Consumers will definitely be deal-seeking, and looking to feel like they are getting the most for their spend,” she said.

Matt Pavich, senior director of strategy and innovation at Revionics, a retail-tech company, said that while prices are no longer increasing at the same pace as during peak inflation, consumers are still feeling the impact of previous price hikes.

“While inflation has cooled significantly and the economy appears to be in a stronger position than previously projected, consumers are still looking for ways to stretch their spend find good deals.”

Pavich expects those strategies will include shopping promotions, trying private label brans, or switching to lower-priced, better-value retailers.