US GDP Growth Well Below Forecasts

2026-02-20 13:33 By Joana Taborda 1 min. read

The US economy expanded an annualized 1.4% in Q4 2025, the least since Q1 2025, following a 4.4% growth in Q3 and well below forecasts of 3%, the advance estimate showed.

Consumer spending slowed (2.4% vs 3.5%), weighed down by a 0.1% decline in goods purchases, while services spending rose 3.4%.

Meanwhile, exports fell 0.9% after surging 9.6% in Q3, and imports also declined, though at a slower pace (-1.3% vs -4.4%).

Government spending and investment contracted sharply by 5.1% (vs 2.2%), subtracting 0.9 pp from overall growth, due to the government shutdown.

On the other hand, fixed investment accelerated (2.6% vs 0.8%), driven by strong gains in intellectual property products (7.4% vs 5.6%) and equipment (3.2% vs 5.2%), as well as a more moderate decline in structures (-2.4% vs -5.0%).

The drop in residential investment also eased (-1.5% vs -7.1%).

Considering full 2025, the US economy expanded 2.2%, below 2.8% in 2024, reflecting increases in consumer spending and investment.



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