(Reuters) -Payments firm Block third-quarter revenue fell short of Wall Street expectations on Thursday, signaling a slowdown in consumer spending and sending its shares down 9% after the bell.

Consumer spending has largely been driven by higher-income individuals who are less sensitive to inflation and elevated borrowing costs, analysts have said.

Lower-income consumers, who live paycheck to paycheck, have cut back on purchases, stretched by higher inflation and elevated borrowing costs. Spending has also normalized from the post-pandemic bounce when Americans splurged on travel and dining out.

Analysts believe a soft landing for the economy could boost consumer confidence and reignite spending growth.

Block's total net revenue rose 6% to $5.98 billion in the quarter compared to last year, but missed Wall Street expectations of $6.24 billion, according to estimates compiled by LSEG.

Meanwhile, Jack Dorsey-led Block has also focused on disciplined expense management by cutting jobs, trimming its real estate footprint, and reducing discretionary spending to drive "profitable growth".

Block's results cap-off the earnings season for payments firms, which were closely watched by analysts to assess the health of U.S. consumers.

On an adjusted basis, Block earned 88 cents per share, beating expectations of 87 cents per share.

Block shares have dipped 2.7% so far this year, underperforming bigger rival PayPal's 32.5% jump.