A shopper walks past a display of artificial Christmas trees at a JCPenney store, in Seattle. Black Friday has morphed from a single day when people got up early to score doorbusters into a whole season of deals, so shoppers may feel less need to be outHoliday Shopping Black Friday, Seattle, USA - 24 Nov 2017

Retail sales rose by more than expected last month, but economists are still betting on a slowdown in consumer spending — the very thing that has been powering the U.S. economy.

Sales edged up 0.8 percent in October, according to the Commerce Department, boosted by auto and gasoline sales, as well as a bounce back by some department stores.

Department stores enjoyed growth of 1.3 percent, with anecdotal evidence indicating some consumers started their holiday shopping early, enticed to get a head start by fire sales at Sears Holdings Corp., which recently declared bankruptcy.

Tax cuts and a strong jobs market, where unemployment is at a 49-year low and vacancies top 7 million, have boosted consumer confidence and in turn spending.

But core retail sales were still relatively subdued. Stripping out volatile gas, autos, food and building material sales, underlying retail sales rose by 0.3 percent.

Looking at this as well as downward revisions to sales for the prior two months, economic consultancy IHS Global Insight once again trimmed its fourth-quarter consumer spending forecast, to 2.4 from 2.7 percent.

“This dampens our outlook for fourth-quarter consumer spending and holiday retail sales,” said James Bohnaker, associate director at IHS Markit.

Michael Pearce, senior U.S. economist at Capital Economics, was more optimistic for the next three months with annualized growth forecast to be between 3 and 3.5 percent. But he was less bullish about next year.

“The plunge in oil prices in recent weeks will boost households’ real disposable income by close to $40 billion, with surging natural gas prices likely to offset only a small fraction of that improvement in purchasing power. With consumer confidence still high, much of this extra cash is likely to filter through to spending on other goods and services,” he said. “But we doubt that will be enough to replace the boost from the earlier fiscal stimulus or offset all of the headwind from tighter monetary policy. Accordingly, consumption growth still looks set to slow next year, which we expect will contribute to an eventual slowdown in overall GDP growth to below its 2 percent potential rate by mid 2019.”

The Federal Reserve has been steadily increasing interest rates from their crisis-induced record low levels and it’s widely expected to push them up for the fourth time this year despite unprecedented criticism from President Trump.

While this so far hasn’t impacted consumer spending, the concern for retailers is that maintaining shoppers’ credit-card balances, student loans and many mortgages will become more expensive as rates continue to edge upward. That could lead consumers to start to curb discretionary spending.

Then there are tariffs as the trade war between the U.S. and China shows no sign of abating. To date, the economic battle hasn’t weighed on consumers so much, but that is expected to change if tariffs on a raft of consumer goods rise from 10 percent to 25 percent at the year end.

Major retailers have already warned they will be left with little choice but to increase prices. And the situation could get even worse as it has been reported that the administration is tentatively preparing more tariffs if planned talks between President Trump and President Xi don’t go well next month.

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