WASHINGTON – President Donald Trump’s multi-front trade wars are dragging down growth, slowing the economy in the second half of the year even as inflation stays low, new government data released Friday revealed.

The data showed that falling exports and slower consumer spending are putting the brakes on economic growth, while inflation is again falling.

That will present a new conundrum for the Federal Reserve, which raised the key borrowing rate on Wednesday and signaled it will continue to hike next year, albeit at a slower pace.

The Fed has continued to forecast strong growth, which would support their case for tightening monetary policy, but the expected inflation spurt and rise in wages have not materialized.

US growth in the July-September quarter was slightly slower than previously reported, dragged down by the large drop in exports, the Commerce Department reported.

With hundreds of billions of dollars in goods hit by retaliatory tariffs, US exports fell by the largest amount since early 2009 at the height of the global financial crisis.

Gross domestic product expanded by 3.4 percent in the third quarter rather than the 3.5 percent previously reported, due in large measure to the 4.9 percent drop in exports, higher than the Commerce Department originally estimated.

Goods exports dropped 8.1 percent, the biggest decline since the first three months of 2015, according to the report, the third and final reading on third quarter GDP.

Trump’s aggressive trade policies, and especially the tariff retaliation from China, has impeded exports, with soybean sales nearly grinding to a halt.

The strong US dollar also has made American goods more expensive.

The dispute with China, even with a ceasefire declared until March 1 for negotiations, has created fears of slowing US and global growth, and caused stock markets to retreat, with Wall Street wiping out all of the 2018 gains.

Gregory Daco of Oxford Economics said the data add to “evidence that business investment momentum continues to gradually cool.”

“Looking ahead, we expect momentum to continue to fade as tailwinds from fiscal stimulus dissipate and rising headwinds from tighter financial conditions, slower global growth, reduced energy investment and heightened trade tensions start to weigh,” he said in a research note.

That message might be filtering through to central bankers.

“I think we are hearing something important for markets and that is a concern around risks to the economy and potential slowdown, further than we currently expect in our base case,” New York Federal Reserve Bank President John Williams said Friday on CNBC.

The Dow Jones Industrial Average jumped 300 points following the comment.

The personal consumption expenditures price index, the Fed’s preferred inflation gauge, was 1.8 percent higher than in November 2017, back below the Fed’s 2.0 percent target, the Commerce Department reported.

The rate peaked at 2.4 percent in July, but slowed to 2.0 percent in October, and continued to move downwards.

The slowdown in November was largely due to a drop in energy prices, but even excluding the volatile food and fuel categories, the index slowed to 1.9 percent year-over-year.

Personal income increased 0.2 percent last month compared to October, amid an equal increase in wages and salaries, the report said. But that was less than economists had forecast.

There was a larger increase in spending, which rose 0.4 percent in the month, but that too was less than expected. Expenditures are 2.8 percent higher than in November 2017.

Other data show fourth quarter growth is shaping up to be even more sluggish.

Purchases of durable goods – big ticket items like appliances, vehicles and machinery – rose in November compared to October, but much less than expected.

Orders were up 0.8 percent last month, less than half the increase economists had forecast, according to a separate Commerce Department report. That follows a big drop in October, and will drag on GDP in the final quarter of 2018.

Excluding transportation goods, durable goods orders fell 0.3 percent compared to October, and when defense is removed, the drop was 0.1 percent.

Orders are still 8.4 percent higher than they were through November 2017, but have been on a declining trend for three months.