We just got a stark warning that the US economy is slowing as trade tensions persist

economy is still taking hits from the US-China trade war.

Overall sales increased 0.2% last month, according to the Commerce Department, falling under the 0.5% consensus estimate from economists surveyed by Bloomberg. The metric was dragged lower by declines in the apparel and restaurant industries, hinting at weakening consumer spending trends as the year comes to a close.

October’s figure was revised higher to reflect a 0.4% monthly climb.

The modest sales increase signals slower economic growth through the end of the decade. The US manufacturing industry fell deeper into a recession last month, placing greater pressure on other sectors to offset losses and pull fourth-quarter GDP higher.

The Federal Reserve is also holding off on granting additional stimulus, pausing its rate cuts to see whether the economy can return to past levels of growth after its trio of cuts through 2019.

While November sales fell under expectations, the lag could also be a result of 2019’s shifted holiday season, JPMorgan Chase economist Daniel Silver said in a Thursday note. December’s sales data will offer greater clarity on whether the US consumer is cooling, since “the late timing of Thanksgiving this year could have pushed some holiday shopping from November to December,” Silver wrote.

Early analysis of holiday season spending suggests December should offset last month’s slump. The “early” holiday season posted the strongest sales since 2013 after jumping 2.2% year-over-year, Bank of America analysts wrote in a December 4 note, defining the period as the 21 days ending on Black Friday. The retail strength was primarily driven by promotions starting before Black Friday and a shift to e-commerce platforms, where consumers can more easily compare items and find deals.

Even if fourth-quarter growth disappoints, the greater US economy is positioned to accelerate in the new year as a “phase one” deal between the US and China alleviates some trade pressures. President Trump announced Friday that the US has agreed to pull back tariffs on Chinese goods as part of the interim deal. The president also canceled plans to levy 15% tariffs on Chinese goods including smartphones and toys, which were previously scheduled to go into effect December 15.

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