Stocks on Wall Street have soared to fresh record highs, but it’s not because the economy is flashing a big thumbs-up sign. It’s not.

The economy is still expanding, to be sure, and sporadic worries about recession have faded again. Yet U.S. economic growth has slowed sharply from earlier in the year and there’s little reason to expect a holiday-season bonanza for the economy.

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More evidence of a slowdown emerged in a pair of recent reports on industrial production and retail sales — windows into how businesses and consumers are faring.

Manufacturers cut production in October by the most in 17 months, reflecting weaker exports, lower oil prices and ongoing troubles at Boeing BA, +6.83% after its 737 Max fiasco.

Retail sales ostensibly rebounded in October after declining in September, but a closer look at the numbers suggests consumers are not spending as much as they were earlier in the year.

“Most of consumers’ additional spending went to gasoline stations, food, and motor vehicles — all necessities for most people,” said Scott Anderson, chief economist at Bank of the West. “Discretionary retail spending categories like clothing, furniture, sporting goods, and electronics were all noticeably weak.”

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So why are stocks soaring?

For one thing, the Federal Reserve has cut interest rates to shore up the economy. Lower rates tend to push investors out of bonds and into stocks.

The Fed rate cuts have also given investors greater confidence that a recession is further away. Lower rates reduce borrowing costs for consumers and companies seeking loans to buy a house or car or to expand a business. They generally lead to more good things for the economy.

The central bank reduced rates mostly over worries that the U.S. trade war with China could endanger the economy, but tensions have eased as both countries returned to the bargaining table. That’s added to the confidence on Wall Street DJIA, +1.33% . SPX, +1.59%

Just in time, it seems.

Escalating trade tensions in August and September dented consumer confidence and briefly spawned fresh talk of recession. Now getting the trade war off the front pages could stabilize the economy and boost the confidence of consumers just as the long holiday shopping season gets under way.

Households are certainly in a good financial position to spend. Savings are high, debt is relatively low, incomes are rising and unemployment is at the lowest level in 50 years.

Yet it’s hard to expect spending to increase at fast as it did during the spring and summer, when consumer outlays rose a frothy 4.6% in the second quarter and 2.9% in the third quarter.

If consumers remain cautious, don’t expect businesses to ramp production of goods and services any time soon.

“With households not shopping that much, there isn’t a whole lot of need for the nation’s factories to keep producing as much,” said Joel Naroff of Naroff Economic Advisors.